Saman Gunadasa
Sri Lankan President Ranil Wickremesinghe who is also finance minister, ended the parliamentary budget debate last Thursday insisting that his government will implement its harsh austerity measures to the letter whatever opposition emerges against them.
Complaining that the country faces “adverse repercussions today due to the short-sighted popular decisions taken in the past”, Wickremesinghe said: “Unpopular decisions have had to be taken for the future prospects of the country.” While insisting electricity tariffs will be increased, he reiterated the point: “We have to make tough decisions… We are here because we didn’t take tough decisions.”
The electricity tariff increase is only one measure of the “tough decisions” that the government is determined to implement. Others include the privatisation of State Owned Enterprises (SOEs), slashing price subsidies for electricity, water and fuel, increased taxes on working people even as inflation soars, and amending the labour laws to facilitate the destruction of hundreds of thousands of jobs.
These budget austerity measures are fully in line with the dictates of the International Monetary Fund (IMF) as the pre-condition for an emergency loan facility to provide temporary relief amid the country’s acute financial crisis.
The government had already increased electricity bills by 75 percent in August. Now the cabinet has approved a further increase of 70 percent in two stages in January and June next year.
The government also increased water rates by 127 percent in August for two million families. Prices for fuel and cooking gas increased by 200 to 300 percent earlier this year. Ending price subsidies for water and fuel will add to the intolerable burdens facing workers and the rural poor.
The government has already appointed a committee to draft laws to break up the Ceylon Electricity Board to 15 entities in preparation for privatisation while vowing to expedite the sale of Sri Lanka Telecom and the Sri Lanka Insurance Corporation. These privatisations will inevitably lead to major job losses and further price increases.
At the conclusion of the debate last Thursday, the budget was passed by 123 to 80 votes. Most MPs of the ruling Sri Lanka Podujana Peramuna (SLPP), the discredited party of the ousted president Gotabhaya Rajapakse, voted for the budget.
The Wickremesinghe government lacks any popular support and is completely dependent on the SLPP’s parliamentary majority. Since ousting of former president Gotabhaya Rajapakse in mid-July by a popular uprising that began in early April, the SLPP has been fractured. With A few exceptions, the SLPP MPs who sit as “independents” in parliament voted against the budget.
The main opposition parties—the Samagi Jana Balavegaya (SJB) and Janatha Vimukthi Peramuna (JVP)—voted against the budget, despite the fact that they insist that seeking IMF assistance and accepting its austerity demands is the only means of addressing the country’s economic crisis.
The Tamil bourgeois parties, including the Tamil National Alliance (TNA), abstained in the vote, thus helping the government pass the budget. In exchange, Wickremesinghe for a vague “promise” to solve the problems of the Tamil people by convening an all-party conference.
This sordid deal underscores the contempt that the Tamil ruling elites have for the masses who will be hard hit by the austerity measures. They are interested above all in a power-sharing arrangement with the Colombo government that boosts their political and economic position at the expense of Tamil working people. Like the SJB and JVP, the TNA is committed to a deal with the IMF.
Workers are already engaged in struggles against the austerity measures. Last week, thousands of workers, including from telecom, insurance, banks, electricity, railways, healthcare and free trade zones, participated in protests in Colombo and other cities against the budget provisions. Last Monday, postal workers joined a one-day strike.
The government and the ruling class as a whole fear that the harsh austerity measures put forward in the budget will spark a new wave of working class struggles and opposition among the rural poor. The government is preparing to crush this growing popular opposition.
During the budget debate, on November 23, Wickremesinghe threatened to crush anti-government struggles imposing a state of emergency and deploying military and police forces. He has imposed the draconian Essential Services Act to ban strikes in the electricity, petroleum and health sectors. He has used the repressive Prevention of Terrorism Act (PTA) against anti-government protesters, including leaders of the Inter University Students’ Federation (IUSF).
As the government prepares for state repression, the 2023 budget bolsters funding for the armed forces and the police. While education and healthcare are being starved of funds, the military and police have been allocated 539 billion rupees ($US1.46 billion) in the budget.
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