La Via Campesina | Bagnolet, 12 May 2022
Sri Lanka is now facing a severe economic, social and political crisis resulting from many years of mismanagement by corrupt political regimes. For several weeks, citizens and social movements have erupted onto streets in protest and are calling for substantive changes in the national polity.
On the 9th of May, bowing to immense public pressure, the Prime Minister, Mahinda Rajapaksa, submitted his resignation to the President (also his brother), Mr Gotabaya Rajapaksa. The situation remains tense as citizens and activists allege that they were targeted by violent mobs who are pro-government. News of brutal crackdown on protesters continues to come in, but people’s movements are pressing on with their protests and are steadfast in their demands.
The crisis in Srilanka has its roots in a series of neoliberal policies pushed forth by global financial institutions. Implementing destructive neoliberal policies advocated by multi-lateral bodies like the World Bank and International Monetary Fund resulted in the State’s withdrawal from essential public services like education, health, nutrition and other basic needs.
The rural debt crisis has pushed several people from the poorest communities to commit suicide. The neoliberal development model has resulted in massive inequities between rich and poor. The poor continue to be exploited through the market-linked reforms that have kept the wages low. Pervasive patriarchal practices have aggravated the challenges for rural women and girls.
Although Sri Lanka ended its civil war in 2009, it still uses military tools to oppress the descendants and even has brought the military personnel to the civil service to manipulate the decisions. Deregulation of the natural resources in the past years has resulted in over-exploitation, thereby rendering Sustainable Development Goals (SDGs) and Nationally Determined Contributions (NDCs) a distant dream.
This year, Sri Lanka’s defaulted on all its external debt of US$51 billion. Sri Lanka finance minister Ali Sabry told the Lankan parliament about declining liquid reserves – which have plunged below $50 million. The main reason for the bankruptcy is the push of the Sri Lankan economy into a debt-dependent economy and the neglect of the productive economy.
Today, the country is in a shortage of fuel, medicine, food, and industrial and agricultural inputs. Their prices have skyrocketed during the last few months as the inflation rate rose to 22.9% in April 2022.
As a result, people have started protests around the country, demanding that the President and the government step down and provide immediate solutions to the current crisis. However, instead of giving answers, the government is suppressing mass uprisings using military force and has declared a state of emergency.
The government reached out to International Monetary Fund (IMF) as a last resort to solve the economic crisis. It has also availed bilateral loans from India and China. The government proposes taxes increases and curtailing public subsidies and welfare to reduce government expenses.
All of these will further increase the prices of essential commodities and worsen the current debt crisis.
Moreover, the government strongly expects Foreign Direct Investments (FDIs) to increase the foreign reserves and serve as a magic pill for the crisis. However, people warn that these investments come with neoliberal conditions to deregulate further – a policy at the root of the current situation. They fear that these FDIs would once again threaten the rights of the people and increase land grabbing and seizure of natural resources.
As La Via Campesina, we stand in solidarity with the peasants, workers and indigenous peoples of Srilanka. We extend our solidarity to MONLAR and other social movements calling for a systemic change in addressing the crisis;
- The Sri Lankan organizations are calling upon the national government and the President to assume responsibility for this crisis and step down immediately. They are demanding an enabling environment to form an interim government representing all the political parties to solve the country’s urgent economic and entailed social issues as per the people’s will.
- La Via Campesina calls for an unconditional and immediate cancellation of all debt! The neo-liberal turn in the 1970s gave Sri Lanka access to funds from the IMF and private financial markets, which has now proved to be a poison pill. The stock of external debt initially rose from just above $1 billion in 1977 to more than $5 billion in 1988, $9 billion in 1998 and $16 billion in 2008. But, following the global financial crisis, easy access to foreign liquidity encouraged governments to prime the economy with support from foreign capital, resulting in the stock of external debt rising to exceed $56 billion in 2020. To continue to service their debt and to be obliged by these debt burdens will limit the country’s ability to ride over the crisis.
- We call upon the international institutions to remain alert and demand that the Sri Lankan government uphold civil rights to allow peaceful protests as enshrined in the country’s constitution and international human rights treaties.
- We support a process toward a future peoples’ government to formulate and implement peoples’ friendly economic policies as demanded by the people to provide short term, long term and sustainable solutions for the future of Sri Lanka.
La Via Campesina calls on the international allies of social movements and communities to stand with the people of Sri Lanka and support their demands to realize immediate solutions to burning economic and social issues.