Addressing parliament Tuesday, Sri Lankan Prime Minister Ranil Wickremesinghe reiterated demands that the working class and rural toilers bear the full burden of the unprecedented economic collapse which has been intensified in every country by COVID-19 and the US-NATO proxy war against Russia.
President Gotabhaya Rajapakse appointed Wickremesinghe prime minister after the former prime minister, Mahinda Rajapakse, was forced out on May 9 amid mass protests demanding the resignation of the president and his government over shortages, the skyrocketing prices of essentials and hours-long daily power outages. Wickremesinghe, who leads the United National Party (UNP) and is the right-wing party’s only parliamentarian, has no popular support.
Wickremesinghe highlighted the severe and worsening economic crisis confronting Sri Lanka and cited the country’s declining harvest of basic food crops in recent months.
“In a few months we will have to face serious difficulties and shortages in terms of our diets,” he said, referencing a Sri Lankan Central Bank forecast that the country’s economy will contract by 3.5 percent in 2022. Wickremesinghe went on to warn that “According to the International Monetary Fund, the situation is even worse. According to them, growth will be -6.5 percent.” He cited these figures in order to justify an intensification of the class-war policies that he and President Rajapakse are beginning to unleash against workers and the rural poor.
“Our traditional political ideologies,” must be set aside “for a short period” and “a concerted effort” made “to rebuild the country,” he declared. “The people of the whole country should play a role in this effort.”
In other words, Sri Lanka’s working masses are somehow responsible for the crisis facing the ruling class and therefore have to shoulder the burden of “rebuilding the country” and establishing “economic stability” in order to maintain the Rajapakse-Wickremesinghe government and bourgeois rule. “Our primary focus here is on economic stability but we cannot recover from this alone by creating economic stability. We need to revive the economy of our country,” Wickremesinghe said.
The International Monetary Fund (IMF) has made clear that implementation of harsh austerity measures is a pre-condition for an emergency loan facility he is attempting to secure in a desperate bid to temporarily avert the dire economic crisis confronting Sri Lanka. These measures include restructuring of public sector enterprises, increased taxes and drastic cuts of the fiscal deficit by slashing government sector jobs, wages, pensions and remaining subsidies.
As well as appointing Wickremesinghe prime minister, Rajapakse also made him finance minister with the specific responsibility of implementing these severe measures as quickly as possible.
On June 2, Wickremesinghe increased Value Added Tax (VAT) from 8 percent to 12 percent. The income tax net was also widened to encompass more sections of the working class, telecommunication taxes were hiked and new surcharges were imposed on certain goods.
Public sector institutions have been instructed to slash their expenditure by various means, including calling only “essential” staff to workplaces and limiting overtime payments. These moves are in preparation for cuts to jobs, wages and other limited benefits received by public sector workers.
Wickremesinghe held talks on Tuesday night with IMF Managing Director Kristalina Georgieva regarding Sri Lanka’s current economic situation. He requested a senior IMF delegation visit the country as soon as possible so that a staff-level agreement could be quickly finalised.
During his parliamentary address, Wickremesinghe also hinted at some of the economic factors driving future attacks on public sector workers. “In the current situation in our country,” he said, “the government is unable to provide funds to cover the losses of any state-owned enterprises. That debt burden can no longer be borne by the state or the state-owned banks.”
On May 29, Public Administration Ministry Secretary Priyantha Mayadunne told a meeting of his officials that public sector employees preparing to retire should not ask for pensions and gratuities “until the economy reaches $US10,000 [per capita income level].” He also complained that “the maximum bearable number of jobs in the public sector is 500,000 or at most 800,000” against the current level of 1.7 million. This means the destruction of between 50 and 70 percent of the existing public-sector workforce.
During his speech to parliament, Wickremesinghe called for the unity of all parties of the political establishment in order to impose the new austerity measures, inviting them to set aside tactical differences and support the government’s “economic, socio-political and public service reforms.”
“Let us build the country first. Let us protect our country from this crisis. Give your support to these efforts. After returning to normalcy in the country within the specified time frame, you may return to your traditional political activities,” he said.
In an attempt to counter any possible hesitation by any section of the ruling elite fearful of how the working class and rural poor will respond to these brutal social measures, Wickremesinghe referred to WWII British Prime Minister Winston Churchill.
“I would like to conclude my statement by quoting Winston Churchill. ‘The pessimist sees difficulty in every situation; the believer sees opportunity in every difficulty,’” Wickremesinghe declared. “We must take advantage of every opportunity that comes our way. We will use these opportunities to build the country with confidence. We will all take full responsibility to bring the country back to normalcy.”
In fact, all the Sri Lankan parties of the political establishment, including the Samagi Jana Balawegaya (SJB), the Janatha Vimukthi Peramuna (JVP) and the Tamil National Alliance (TNA), along with their pseudo-left hangers on like the Frontline Socialist Party (FSP), have already demonstrated their support for the already imposed IMF policies.
None of them have opposed the VAT hikes and other massive tax increases announced last week or denounced the massive job cuts being prepared in the public sector. The SJB, JVP and TNA, moreover, have previously implemented or supported Sri Lankan governments implementing similar harsh austerity policies in the past. In fact, the SJB previously criticised the Rajapakse government for not going to the IMF sooner, while the JVP has signalled its tacit support by remaining silent over the latest IMF demands.
Workers, young people and the rural masses have already shown that they will not accept the sort of attacks on their social and democratic rights being prepared by the Rajapakse-Wickremesinghe government. The working class over the past two months has played a central role in the ongoing popular protests against the Rajapakse government, with millions of workers participating in two one-day general strikes on April 28 and May 6 and a later general strike, which began on May 9 in response to government-instigated goon attack on protesters and ended on May 11 when it was called off by the unions.
Unable to dampen down rising anger over the government’s public restructuring and privatisation measures, the Ceylon Electricity Board Engineers Union has called national industrial action, starting at midnight Wednesday, to protest changes to the Electricity Act that allow India’s Adani Group to establish wind-power projects in the north.
The Rajapakse-Wickremesinghe government has responded to the planned strike action by declaring the electricity supply and the health sectors essential services, making clear that it is on a collision course, not just with these workers but the entire working class.
As the Socialist Equality Party (SEP) has consistently explained, the trade unions function as an industrial police force on behalf of the government and employers, working to suppress and betray strikes and other industrial action.
Workers need to organise independently of the unions, taking these struggles into their own hands by forming action committees at every factory, workplace, plantation and neighborhood.
Working with the political support and guidance of the SEP, such committees must rally all sections of the working class and the rural toilers across the island to fight for the establishment of a government of workers and peasants committed to socialist policies. These action committees must reach out to the International Workers Alliance of Rank-and-File Committees (IWA-RFC) launched by the International Committee of the Fourth International and forge the unity of Sri Lankan workers with their class brothers and sisters internationally in a common struggle against global capitalism.