Sri Lanka crisis: What is to be done?

Deepening crisis 

Sri Lanka came to a halt early this month as the government announced that it does not have enough fuel or any money available for imports. All private vehicles are banned and schools were closed. Workers were asked to work from home. Prices of all essential food continue to rise. Food inflation has gone over 80% and continues to increase. According to some reports, the real inflation rate has now gone well over 130%, the second-highest in the world. The government continues to rely on handouts from regional countries for essentials. No clear estimation has been done in terms of the impact. But the lack of food, fuel and a future has plunged almost the entire population into desolation. According to the World Food Programme, almost a quarter of the population is “food insecure”.

Government response

The current government continues to preach to the population that misery is unavoidable and has asked them to tolerate it. The prime minister warned that the “crisis will get worse”. One MP even asked the population to prepare to eat one meal a day. The opposition leader says Sri Lanka “must accept extreme austerity”.

Capitalists unanimously argue for further borrowing as a fix to the crisis. The government owed $7 billion in debt repayments and interest this year alone. Despite its bankruptcy, the government is hell-bent on borrowing more to pay the debt. All main past lenders have refused to provide meaningful support, and are instead in negotiation to ‘restructure the debt’, i.e. renegotiate the terms of payment and expand further control of resources. Indian vulture capitalists such as Adani are now given full control of vast acres of land and so-called r1enewable energy projects in Mannar (a northern city). The Indian government continues to keep a credit line and supply of emergency food following the memorandum of understanding signed by both countries in March this year. In addition to the development of ‘fishery’ harbours across the northern coast, India was given permission to build a Maritime Rescue Coordination centre, and maritime project developments in the islands near Jaffna. None of the capitalist parties opposed this. The right-wing Tamil National Alliance (TNA) actually welcomed this and took part in negotiations. In return, the Indian government was reported to have promised “quality, justice, peace, and dignity to Tamils within the framework of a united Sri Lanka”. The controversial Colombo West International Container Terminal (CWICT) has also now been given to Modi’s allies in the Adani group.

The government is also changing and amending several laws to accommodate vulture capitalists. The changed electricity law now completely abolishes competitive bidding and paves the way for the Adani group to take over whatever they prefer. The current government and its capitalist allies want to make sure that they get the maximum out of the current crisis. Despite the rhetoric that “all have to pay for the crisis”, not a single attempt is made to take the wealth of the super-rich or even control the profits they continue to make. Instead, the top millionaire in the country is now appointed as minister of investment promotion. The tycoon Dhammika Perera, also known as the ‘casino king’ became infamous following the illegal import of garbage from Britain. Britain continues to make illegal deals and pays an enormous amount of taxpayers’ money to dump its waste in neo-colonial countries. Millionaires and corrupted politicians such as the Rajapaksa family and Dhammika Perera collaborate together in these corrupt deals. He was not elected as an MP. He was selected by President Gotabaya Rajapaksa based on the national list provision available for parties and joined the parliament following Gotabaya’s brother Basil’s resignation. This unelected tycoon has now been given the power to make all the rotten deals with various vultures descending on Sri Lanka to exploit the opportunity presented to them.

Despite losing some control in some of the controversial projects such as the Colombo port – or the potential interests in the northern islands – China also continues to maintain its full grip on all the deals that it had made. China had offered to lend more to pay back the loans! China also encourages Sri Lanka to make deals with the International Monetary Fund (IMF) to pay back the loans. Many behind-the-scenes negotiations and deals made are not available in the public domain. The majority of the past deals that the Rajapaksa government made were like this and were kept secret for a long time.

The government is already making a special agreement with the IMF for further borrowing using its Extended Fund Facility (EFF). Though the details of negations were still kept secret the IMF released a statement that they have completed the ‘first review’ to provide the funds. They want the government to step up structural reforms. The EFF agreement with the IMF is usually based on the ‘Washington consensus’: i.e. the reduction of state subsidies, increasing prices, privatisation of state-owned services, changing labour laws to reduce wages and conditions, promotion of a big-business friendly tax system, and other measures. The state will be prevented from spending the borrowed money on health and education. The education sector in particular will be put under huge pressure. Introducing private education is part of the deal that the Indian government had already made. Numerous researches are available detailing how IMF deals have helped to reduce education spending across the world. IMF deals made massive price hikes to energy recently in Pakistan. Already, the electricity board is requesting the government increase the price by over 800%. The government, together with vulture capitalists, will work to end the public services in Sri Lanka. Free health service and education in Sri Lanka – a legacy of the struggle that took place in the 1940s and following decades – remains the pride of the working class up until now. The crisis will be used to dismantle it.

Is there any other way?

Borrowing more is unanimously preached as the only way out of the crisis. Central bank governor Nandalal Weerasinghe even went a step further, claiming that the crisis could have been avoided if the government had gone to the IMF sooner. Further borrowing arrangements that the government is making will not solve the crisis; instead will worsen it. Even with all the deals that are made, the Indian government is not prepared to lend even half of Sri Lanka’s debts this year. Even if they put together all the borrowing, it still won’t be enough. It is only for the interests of the capitalist that the government is still hell-bent on paying back the debt.

The wealth of the super-rich and corrupted political elite continue to be protected while horrific attacks are now being unleashed on workers, farmers, youth and the poor. Following the brutal genocidal end of the war in 2009, the Rajapaksa family whipped up triumphalism and used it as a cover to hide the conditions that they have created for looting and gross corruption. According to the information leaked in the Pandora Papers, the Rajapaksa family alone made billions – now secretly owning luxury properties, artworks, and cash deposits offshore. Various estimates put their wealth between $5 billion and £18 billion. More than 300 dollar millionaires have been created in Sri Lanka since the end of the war. These millionaires made record profits last year during the pandemic.

Neo-liberal policies and gross corruption are the main reasons for bankruptcy (For more details: What are the causes of the economic crisis in Sri Lanka?). However, the Covid pandemic and the government’s decision to cut tax are portrayed as the reasons by all the capitalist media. The right-wing media and politicians in Sri Lanka and outside continue to repeat this as a mantra to hide the real reasons and to continue with austerity measures.

The argument that the people had to pay for the crisis that they played no part in creating must be rejected. Instead, what we need is an implementation of an emergency economic plan to defend and improve living standards.

The emergency plan should include the cancellation of all debt with compensation only paid to those in real need. While refusing to pay the macro-debt, all micro-debt that exists for small businesses, farmers, and individuals should be cancelled. This, of course, can only be delivered through bringing the central bank and the key finance sector under the democratic control of the state. Key pillars of the economy such as the fuel and food production sectors, etc. should be brought under the full democratic control of the workers who run them. The wealth of the rich and corrupted elite such as the Rajapaksa family should be confiscated and reinvested in the production of essential commodities. Additional subsidies should be made available to fast-track the emergency production of essential food items. Adequate democratically controlled distribution of all essential commodities should be organised. Those super-rich who want to move their wealth abroad should be barred and effective capital controls should be implemented. Price controls should be implemented immediately for all essential items.

Who can implement alternative changes?

These alternative measures will not be implemented by the current government. No opposition or any party that supports capitalism will take such actions that stand in opposition to their profit interests. Even the JVP, which claims to be a left party, is not prepared to put forward such serious measures because it sees no alternative to working within the capitalist system. If these emergency plans are to be implemented, the current government must be brought down completely and replaced with a government of workers, farmers, youth and the poor. How this alternative power can be created is the key question that faces the protest movement in Sri Lanka.

There is no question that such a government can bring about lasting changes. There is enough wealth to invest in producing commodities that are essential for livelihoods now. However, this will not be enough. Sri Lanka has limited resources and years of neo-liberal policies have increased its dependency on imports. In addition, Sri Lanka is constantly under pressure from India, China and western powers that want to have a stranglehold on Sri Lanka for their own geopolitical and other interests. Any government that started to implement an alternative economic plan would come under huge pressure from these regional and international imperialist powers.

These so-called powers may appear strong but they face opposition and tensions domestically amid international crises. Modi’s regime was pushed back by the mammoth farmer’s struggle and a general strike in which millions of workers took part. It is important to appeal to these forces to create a regional alliance of all in struggle. Sri Lanka cannot survive in isolation. It will be wrong also to assume that full ‘self-sufficiency’ can be created in any modern nation. The new government will be forced to make deals and contracts to obtain adequate necessities that include fuel. This, of course, will not have to be based on a bogus ‘anti-imperialist alliance’ which ends up endorsing undemocratic and dictatorial regimes. But it will have to be based on the appeal to support the workers in Sri Lanka and form an alliance with workers who are in struggle across the planet.

The movement in Sri Lanka so far has shown enormous potential. The insurrectionary mood that emerged following the planned attack on protesters organised by former prime minister Mahinda, after his forced resignation, is an indication of the widespread anger that exists. It also revealed the strength of the movement. This strength presents a great opportunity to bring about fundamental change that will have long-standing benefits for workers and the poor in Sri Lanka, and can become a beacon for the mass struggle that is developing across south Asian countries and beyond.

But if the protest movement is to win, clarity must emerge in terms of demands, perspectives, method of organisation, democratic structures, leadership, etc.

We understand the desire for unity in the struggle, but this needs to be based upon either specific actions or a common set of demands. However, the unity of the movement cannot be maintained on an abstract basis, but with clarity of its aims and methods to achieve it. The current government, together with all capitalist institutions (including the media), has used various techniques so far to derail the developing movement. Attacks on and the criminalization of protesters, the threat of repression by moving the army on the streets, and attempts to bring together all parties to present to the public a sort of ‘patched-up’ national government, all played a part in fracturing the movement to an extent. Immediately after he was appointed prime minister, Ranil Wickremesinghe immediately declared war on the population, saying ‘things will get worse”.  The US embassy was the first to congratulate the appointment of their ally. Within minutes they started to portray Ranil’s appointment as a solution. India also came quickly to the rescue of the government. The JVP also played a criminal role in calling off trade union actions (through the unions they control), and met with the US ambassador and gave a certain legitimacy to the potential deal with the IMF.

At that point, Gota’s regime was on its last legs. Trying to survive by any means, Gotabaya agreed to let go of his brothers and loosen his grip on power, but refused to give up the position of the executive presidency, which in effect grants him full power to control the affairs of the country. The collapse of the government was somehow prevented and indirectly protected by these powers and all capitalist right-wing forces in the country. This gave a vital time gap for Gotabaya to take measures to further strengthen his position and weaken the movement.

Mass protests must continue

The mass protest that is organised for 9 July should be used as a launchpad for further escalation. Under no circumstances should the protest be called off and more detail discussion is needed in term of what is the next step should be. Whenever the capitalist elite was unable to suppress the movement by force, it often buys time through prolonged negotiations –or proposals of a ‘new government’ that is in no way new. The new government is comprised of past disgraced politicians, such as Ranil Wickremesinghe who doesn’t even have the support of a single member of parliament – his position in parliament is also through a national list allocation. We see these developments take place across the world where sharp movements have developed. The developing movement in Sri Lanka has a lot to learn from the mass movements that have taken place in Argentina, Chile, Lebanon and, more relevantly, in Sudan.

Protest leaders should immediately reject deceptive deals that are aimed at maintaining the power of the old regime. Replacing these leaders with potentially ‘new and clean’ capitalists will not be a solution. Though most of the elite and right-wing politicians are corrupt and have been looting public wealth for a long time, the cause of the crisis is not just linked to corruption. A simple ‘clean-up’ operation will not fix the fundamental problem of the economic crisis. The debt crisis and other crises linked to it developed as a result of decades-long neo-liberal policies, and solutions will never be found with the continuation of such policies.

Protesters should come forward to agree on key demands further to the demand of ‘Gota go home’ (demanding the resignation of the president). We must demand that the whole government steps down. There should not be any trust in the IMF, the Indian, Chinese, and western governments to deliver on behalf of the struggling masses. There should be an appeal to establish committees in workplaces. Trade unions in particular should take initiatives to build workers’ committees in all workplaces. Committees of workers, peasants and the poor should be formed in all villages and towns. Democratically organised committees can come together at national level to form a national body. This organisational approach can harness the power of mass movement and maintain it outside the walls of the capitalist parliament. By maintaining such a powerful mass base the process of democratically re-organising the society can begin. These bodies can organise a democratically elected revolutionary constituent assembly that can bring together all parts of society to pave the way for a workers-led government.

The most important part of the strength of the mass movement comes from the working class. Despite various divisions and weaknesses that exist among the union leadership, the newly formed collective of trade unions and mass organizations had called general strikes, a Hartal, and an indefinite Hartal. The Hartal in May brought the country to a standstill. The complete shutdown showed who really runs the country: not the parliament of the corrupted rich, but the working class. The mass movement should appeal to the unions to come forward with decisive action. This also presents an opportunity to bring about a radical change in the way the trade unions are. There should not be any affiliations to the capitalist parties. Unions linked to the SLPP, SLFP, and UNP should cut their links and a national coordinating committee of all unions should take initiatives to link up with the movement and form mass political representation that will truly reflect workers’ interests. Trade union actions such as general strikes bring with them the real question of who is in control of a country’s’ affairs – In other words, who holds power. What sort of general strike are we calling for? These powerful actions should be linked to maintaining that power through establishing organizational representation with the aim of replacing the current rotten system with the real power lying in the hands of working people and the poor.

The strength of the movement also flows from its ability to bring together various sections of society that are divided by ethnicity, language, religion, and other identities. Farmers and hill country workers have been protesting for a long time. Their demands should be incorporated into the movement. Adequate subsidies for all peasants must be ensured along with providing land for all landless farmers to cultivate. The wage demands of the hill country workers must be met and their land rights should be ensured.

What Tamils want?

Although the Tamil-dominated regions remain the poorest in the country, their participation in the struggle has been limited. This is partly due to the fact that most Tamil leaders also fear the current movement and refuse to mobilise. But at the same time, there is also genuine suspicion and discomfort felt among Tamils – particularly among the active layer. There is a widespread worry that exists among Tamils that the movement completely ignores their genuine democratic demands that include the release of all political prisoners, justice for the forced disappeared, etc. Even at this stage when the true brutal face of the Rajapaksa family has been exposed, why can’t there be an admission that war crimes have been committed under their leadership? Why are the killings that took place during the war and the gross injustices done by the Rajapaksa family not acknowledged? On the other hand, the right wing in the south uses Sinhala-Buddhist nationalist propaganda to keep away Tamil participation. The fear of Tamil separatism is used to deceive the Sinhala working class. It hides the fact that the Tamils’ demand for separation itself stems from the ongoing repression of democratic rights and oppression. A clear leadership should emerge that has a full understanding of how unity of the working class can be forged to achieve a better life for all. Unless the national aspirations of Tamils are addressed, the potential division of the movement on this basis will remain. It is not a simple question of racism of one against another or parity of language. The national question runs deeper than a simple demand for equality.

However, Tamils (including the right-wing TNA) have not put national demands as an ultimatum or a pre-condition for their support of the mass protests. In fact, many Tamils have joined the protests across Sri Lanka and in the diaspora. The section that opposes the mass movement or holds back the Tamils from the protest is doing it for political class reasons rather than based on a nationalist position. While nationalism has increased massively among Tamils due to the ongoing repression and lack of justice, the class divisions have also widened. A sharp division exists among those who claim to support Tamil nationalist demands. Sections of them, including the TNA, support IMF and Indian intervention to solve the current crisis – hence they see Ranil as their ally and saviour.  It is this right-wing position that is the fundamental reason behind the distance maintained by sections of the Tamil leaders and activists, etc. This is the case in the Tamil diaspora as well where well-off Tamil youth don’t see this mass struggle as their venue of action. This position should be challenged. However, they can only be properly challenged when the movement takes steps to counter the anti-Tamil sentiment that exists among some layers. All democratic demands should be embraced by the movement. A call should be given by the leaders of the movement towards Tamil youth to join together to bring down the current regime and all miseries along with it. Tamil national aspirations do not stand in opposition to Sinhala workers’ rights – instead, they can flow together with them. The establishment of a revolutionary constituent assembly can incorporate the demands of all sections of society. The workers’ government will not be an obstacle to Tamil rights but will work to form a socialist confederation that can implement a united democratic plan to share the resources of the region and beyond.

To navigate through difficulties and potential divisions, clarity must be achieved in terms of demands and programmes for the movement. The Inter-University Students’ Federation (IUSF) in the past made some programmatic proposals.  Of course, the Frontline Socialist Party works closely with the IUSF and the United Socialist Party (USP), which shares most of these views, has given support. The USP in particular made a number of critiques in relation to the programme with the view of further developing it. This critique is not a comprehensive list of what the USP demands or puts forward in opposition to the IUSF; rather it aims to complement it and develop it further.

After a long campaign to force the movement to get some direction, finally the leaders of Aragalaya (Struggle) released their action plan in the name of the protesters of Galle Face in Colombo. This action plan (demands) is the collective work of those who are involved in the protests and the best demands that came through the movement to this date. Of course, the USP and CWI are very relieved to see some of the demands that it has been articulating for some time being incorporated. It is reassuring to note that finally a united position is emerging, in relation to cancellation of all debts, for example. However, while welcoming these development s, the USP & CWI will appeal to Aragalaya to improve on the current position on a number of issues –  in particular the impossibility of any permanent improvement without breaking with capitalism. We appeal to them to consider this article as a contribution to this discussion.

Demanding that the whole government steps down leaves the question of what should replace it. What will be the character of the so-called new ‘interim government’? What will its programme be? How will it be formed? The mass movement uses all its power and energy to get rid of a rotten regime and should not end up re-inventing old as new. We must articulate what sort of government we want. Even small tasks such as the abolishment of the executive presidency, establishing a new democratic constitution, etc. will not be done by any existing forces. That includes old retired politicians or pro-capitalists who are often presented as ‘respectable’ members of society. Instead, we would argue that power should be with those who lead the struggle – i.e. the worker’s leaders, farmers, youth leaders of Aragalaya, etc. The establishment of the proposed people’s council should not be to act as a check on parliament, but to hold enough power to implement what we need. We welcome more discussion and debate to be held in the movement in relation to what national body should be established, what organizational form it should take, etc. There should also be a discussion and agreement in relation to how we can continue the mass protests and resist any attacks. The current crisis in some way pushed back society, which also presents enormous challenges. The lack of fuel, food and potential cuts of electricity, etc. will test the movement. In that sense, we have a lot to learn from past struggles and methods.

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July 2022