October 4, 2022.
The ongoing economic crisis has had a devastating impact on people in Sri Lanka. This report highlights the challenges people in Sri Lanka are facing in accessing their rights to health and food, and some of the limitations of existing social security programmes in the country. It focusses on the experiences of people who have precarious jobs and rely on daily wages as their only source of income, and on people from the Malaiyaha Tamil community, both of whom are likely to be particularly impacted. As the crisis progresses, there is serious concern that its impacts will both deepen and spread wider.
“We are near total breakdown”.
Kashi (name changed), 45-year-old trade union representative working with the Malaiyaha Tamil community Sri Lanka is facing a severe economic crisis. This is a result of government policy decisions over decades, as well as more recent external factors. The crisis has had a catastrophic impact on economic and social rights.
There have been serious shortages in food, fuel, medicines, and other essential items. As of June 2022, an estimated 11% of households reported their income had stopped and 62% of households said their income reduced; and as of July, food inflation reached 90.9% on a yearly basis. Several countries have offered emergency financial assistance to Sri Lanka. Humanitarian actors and international organizations have started to repurpose existing activities in Sri Lanka towards mitigating the impacts of the economic crisis.
However, current support is insufficient to meet needs: as of 2 September 2022, only 24.7% of the funding that the United Nations Office for the Coordination of Humanitarian Affairs estimates is needed to respond to the crisis has been committed.
The report highlights the human rights impacts of the current economic crisis in Sri Lanka, with a focus on the rights to adequate food and health. It outlines some key steps that the Sri Lankan government and the international community (including donor states and Sri Lanka’s governmental and private creditors) must put in place to protect human rights, including moving towards universal approaches to social protection; increasing the amount of international assistance available; and considering all options for debt relief, in line with human rights obligations, including in negotiations around debt restructure and relief in Sri Lanka.
Research for the report is based on: (i) 55 interviews with daily wage earners; people who have precarious jobs; people working in the tea plantation sector from the Malaiyaha Tamil community; public health workers; staff members of civil society groups, international organizations, and humanitarian organizations; and individual experts on issues relevant to this report; (ii) secondary data, including relevant statistics around Sri Lanka’s debt obligations, published by the Sri Lankan Central Bank and international organizations; needs assessments conducted by civil society groups and international and humanitarian organizations in the context of the ongoing economic crisis; and studies of Sri Lanka’s health, tax and social security systems. Amnesty International sent letters containing a detailed list of questions to relevant government ministries. Any responses have been reflected in the text of this report.
Right to Health
People’s right to health has been threatened in the economic crisis. Serious shortages in essential and lifesaving drugs and equipment emerged as one of the major concerns in Sri Lanka as the economic crisis deepened. When its foreign exchange reserves began to run low, the government was unable to purchase the required drugs and equipment, leading to severe shortages. Health workers in the public health system and staff members in non-governmental organizations confirmed the extent of shortages to Amnesty
International and explained how they coped. For example, in June 2022, a paediatric surgeon said she had seen shortages in intravenous potassium chloride, intravenous antibiotics, and insulin, and shortages in equipment (intravenous lines, canulae, syringes) in paediatric sizes. “We even had a shortage of gauze”, she said. “We didn’t have catheters and endotracheal tubes in smaller sizes, so we were asked to re-use them”.
In other instances, people were asked to purchase medicines or equipment from private pharmacies, because government hospitals did not have stocks. “But not everyone could afford it. Those who couldn’t, just went home and came back worse”, a doctor said.
Severe shortages in fuel in Sri Lanka as a result of the economic crisis have also impacted people’s ability to access timely and quality healthcare. Fuel shortages have made transport either unavailable or extremely expensive, and made it difficult, if not impossible, for people to physically access healthcare services. The difficulties are further compounded for people who are living and working in plantations from the Malaiyaha Tamil community, for whom health facilities were already too far away, even prior to the crisis.
Over 6.2 million people (28% of the population) are estimated to be moderately acute food insecure, 66,000 people are estimated to be severely acute food insecure, and 8.7 million people (39.1% of the population) are not consuming an adequate diet.
Right to Food
People’s right to food is also at risk. Food inflation in Sri Lanka has become alarmingly high. The steep increases in the price of food, combined with reductions in household income and loss of livelihood, mean that people are either unable to afford sufficient and nutritious food, or must spend a much larger proportion of their income on food-related expenses, often at the cost of other essential services like healthcare, housing and education. Over 6.2 million people (28% of the population) are estimated to be moderately acute food insecure, 66,000 people are estimated to be severely acute food insecure, and 8.7 million people (39.1% of the population) are not consuming an adequate diet.
There is also a linked, specific concern around child malnutrition. Even prior to the crisis, malnutrition in children under five was widespread in Sri Lanka. The crisis worsened the problem. With falling incomes, shrinking livelihood options and inflation in food prices, people are less likely to be able to afford adequate and nutritious food for their children, as well as for women during and after pregnancy. In June 2022, doctors at the Lady Ridgeway Hospital for Children (LRH) said 20% of children admitted had malnutrition.
As the economic crisis has intensified and the lack of essential items and services has become more acute, people in Sri Lanka have engaged in protests calling for the government to take responsibility for the economic crisis. The government has responded to the largely peaceful protests with excessive use of force among other human rights violations. They have also implemented emergency laws giving sweeping powers to the police and armed forces in an effort to curb the protests.
In the context of sky-rocketing inflation and severe shortages in food, medical equipment and goods, and fuel, among other commodities, access to adequate levels of social protection is key to protecting human rights. There are several government-run schemes and programmes in Sri Lanka that provide different types of social protection. However, there are some key, long-standing limitations to these programmes, particularly the Samurdhi programme, that have been further exposed by the current crisis. These include lack of sufficient funding, inadequacy of the level of benefits, poor targeting, and the exclusion of a large proportion of people due to administrative inadequacies.
Several arguments have been made for why schemes offering universal benefits are a desirable way to guarantee the right to social security. For example, the targeting of benefits based on levels of poverty has been criticised by experts for arbitrariness, excluding people who should be covered, stigmatizing effects, and higher administrative costs. These concerns already existed in Sri Lanka, and their impact has become more acute. Civil society groups are articulating the need to move towards more universal approaches to social protection in the context of Sri Lanka’s economic crisis. This is particularly relevant because the impact of the economic crisis is spreading to much larger sections of society.
The government of Sri Lanka is currently considering a new social protection strategy. However, there is concern that in the current economic and fiscal climate in Sri Lanka, the government may introduce reforms that simply increase the number of those eligible for targeted assistance, based on poverty levels, instead of addressing the other limitations of these programmes as well. This would be a missed opportunity.
Furthermore, reforms to existing social assistance programmes should not rely on narrower targeting and move towards comprehensive social protection coverage. It is also crucial for any reform of the social protection system in Sri Lanka to be carried out in line with international human rights standards, principles of transparency, and with the meaningful participation of people who will be affected by it, including those it is intended to support.
Among other obligations, international human rights standards stipulate that governments and international financial institutions should conduct human rights impact assessments before economic reform programmes are implemented.
AVOIDING HARMFUL AUSTERITY AND ASSESSING IMPACT
In times of economic crisis, states often put in place measures to reduce deficits by increasing government revenues and reducing expenditure. There is concern that with time, the Sri Lankan government may take such measures. In terms of reducing expenditure, human rights monitoring bodies have noted, both, the human rights risks associated with austerity programmes and that states continue to have human rights obligations even “in times of economic crisis, [when] adjustments in the implementation of some Covenant rights might be inevitable”. On this basis, they have developed criteria for how austerity measures should be developed and implemented, where they are considered necessary.
Among other obligations, international human rights standards stipulate that governments and international financial institutions should conduct human rights impact assessments before economic reform programmes are implemented. Human rights impact assessments are necessary to understand what the possible impact of a particular policy might be, especially when these may not be obvious, and to put in place measures to mitigate this impact. It is not clear whether these have been conducted, or are planned, in Sri Lanka.
Austerity measures are consistent with states’ human rights obligations only after less harmful alternatives to reduce the deficit have been carefully considered. Therefore, before the government of Sri Lanka introduces potentially regressive policies, it must explore other, less rights limiting, options and address taxation in a manner that equitably increases revenue without disproportionately burdening people on lower incomes.
Analysts and civil society groups have proposed options to this effect in Sri Lanka, which are considered in more detail in this report.
HUMAN RIGHTS CENTRAL IN UPCOMING DEBT NEGOTIATIONS
Reducing Sri Lanka’s large debt repayments will create more fiscal space for the government to invest in health and social protection. Sri Lanka’s public debt has increased substantially over the past decade. As of end 2021, total outstanding external debt of the government was USD 32.2 billion. At 30.1% of GDP, Sri Lanka had “one of the highest levels of gross financing needs [i.e., the amount it needed to borrow and the debt that matured each year], among emerging market economies” according to the International Monetary Fund (IMF). Its debt service payments were also very high. For example, in 2020, Sri Lanka’s interest payments alone were 71.4% of government revenue (the global average is 6% and the average in South Asia is 21.1%), and 32.9% of government expense (the global average is 5.4% and the average in South Asia is
22.6%). The fact that the government needs to spend this amount annually to service its debt reduces the fiscal space available for the government to spend on sectors like health, education and social protection, which directly impacts economic and social rights.
In March 2022, the IMF said that Sri Lanka’s public debt was unsustainable. In May 2022, Sri Lanka defaulted on its debt payments for the first time. On 1 September 2022, IMF staff and the Sri Lankan authorities reached a staff-level agreement on a 48-month arrangement under the Extended Fund Facility (EFF) for about USD 2.9 billion. As negotiations around the agreement between Sri Lanka and the IMF continue, it is important that human rights and social spending are prioritized. Furthermore, the government
must ensure that discussions and decision-making are transparent.
The IMF also stated that “debt relief from Sri Lanka’s creditors and additional financing from multilateral partners will be required to help ensure debt sustainability and close financing gaps”, as negotiations with the government continue. The government of Sri Lanka is currently in discussions with a range of creditors and lenders on restructuring Sri Lanka’s debt. These actors all have human rights responsibilities, and the outcomes of these discussions have significant human rights impacts. Debt restructuring should enable Sri Lanka to service its external debts without compromising its capacity to fulfil its international human rights obligations. Debt relief to reduce the quantum of annual repayments is needed, and all options for debt relief should be on the table, including debt cancellation.
RECOMMENDATIONS
Amnesty International has made a comprehensive set of recommendations in the context of the ongoing crisis to all relevant actors. The full list appears at the end of this report. Some of the key recommendations include:
1. The Sri Lankan government should reform existing social assistance programmes in a manner that offers comprehensive social protection coverage, and moves away from narrowly targeting particular groups.
2. The Sri Lankan government should increase expenditure on social assistance programmes to respond to the growing need for support, and ensure allocations are sufficient to ensure the right to an adequate standard of living for everyone.
3. Sri Lanka’s multilateral, bilateral, and private creditors should act in accordance with their human rights responsibilities while negotiating Sri Lanka’s debt restructure, ensure debt relief, and consider all options for debt relief including debt cancellation.
4. Bilateral and multilateral donors should support Sri Lanka with all possible financial and technical assistance in a manner that allows the government to strengthen human rights protections for people in the country.
5. The Sri Lanka government should avoid harmful austerity measures inconsistent with human rights, and ensure that future loan agreements, in particular those involving conditions linked to economic, social and fiscal policy reforms, are transparent and available for public scrutiny.
Read the full report: AI report 04 Oct ASA3760522022ENGLISH