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Tuesday, June 18, 2024

Sri Lanka opposition-affiliated unions protest IMF prescribed debt restructuring plans

ECONOMYNEXT – Left-leaning activists, union leaders affiliated with opposition parties and other groups held a demonstration in Colombo on Monday August 28 against what they called the “theft” of Sri Lanka’s employees’ provident fund (EPF) in an International Monetary Fund (IMF)-prescribed domestic debt restructuring programme.

“Stop EPF/ETF (employees’ trust fund) robbery! Do not kill people to pay debt!” was the theme under which the protest was held in Colombo Fort Monday afternoon, with other slogans demanding, among other things, that the government scrap its plans to restructure state-owned enterprises (SOEs) also prominently on display.

Flags symbolically rejecting the IMF were also seen flying at the protest site, with protestors shouting their demands over a police announcement that they were not permitted to make their way to the President’s Office.

Ananda Palitha, a trade union leader affiliated with Sri Lanka’s main opposition party the Samagi Jana Balawegaya (SJB), told reporters at the protest that President Ranil Wickremesinghe, who he claimed had been elected illegally by 134 MPs controlled by the powerful Rajapaksas, is “sacrificing” the people to the IMF “farce”.

“Under the thumb of bank robbers and tax evaders, the president has today authorised the central bank to cut the EPF,” said Palitha.

Though it is correct that the Rajapaksa-controlled Sri Lanka Podujana Peramuna (SLPP) elected Wickremesinghe as president following the forced resignation of ex-President Gotabaya Rajapaksa in July 2022, the legality of the election has not been questioned by experts. The SJB, which Palitha is affiliated with, also participated in the election, throwing its weight behind rival candidate Dullas Alahapperuma.

Notably, the SJB has been pushing for an IMF programme since well before last year’s currency crisis, the worst in decades. However, with rival opposition party National People’s Power (NPP) and other leftist groups which led the 2022 people’s protests taking an increasingly antagonistic stance against the IMF and the painful but arguably necessary reforms it has prescribed for Sri Lanka, the SJB has had to change its tune somewhat.

Though the SJB voted against Sri Lanka’s domestic debt restructuring (DDR) plans at the last minute, MP Harsha de Silva, the party’s foremost voice with regard to economic policy, had until then expressed the need for it, as long as there was no haircut imposed on depositors. He later said that the parliamentary Committee on Public Finance (COPF) that he leads had voted against the DDR proposal over concerns about the burden falling on superannuation funds including EPF without considering the consent of depositors.

“While banks were excluded due to existing stress & non-performing loans, the EPF/ETF, which carries most of the burden, faces potential opportunity loss and lacks a say in decisions impacting peoples’ life savings. This raises questions about #equity and #transparency,” he tweeted on June 30 though he himself abstained from voting at the COPF meeting.

On Jun 20, SJB and opposition leader Sajith Premadasa went as far as to say Sri Lanka must inform the IMF that both the government and opposition are against restructuring domestic debt.

This is notwithstanding the party’s repeated calls until then for an IMF programme that would necessarily include a DDR exercise though it was never strictly spelt out in the agreement.

Whether Palitha’s active participation in Monday’s anti-IMF protest signals a total about-turn from the SJB with regard to the IMF remains to be seen.

Meanwhile, the Central Bank of Sri Lanka (CBSL) representatives of Monday’s protest campaign had failed to make use of an invitation by the CBSL for a discussion on their concerns.

A group of persons through the Colombo Fort Police Station had requested for a meeting with CBSL officials to discuss the matters pertaining to DDO and EPF, the Bank said in a statement Monday afternoon.

“In response to the said request, the Governor of the CBSL, through the officials of the Colombo Fort Police Station, has informed the said group of persons that a meeting will be convened today itself at 2.30 p.m. at the CBSL premises with five persons representing the said group of persons.

“However, after communicating the details of the meeting, the said group of persons has informed the CBSL through the Colombo Fort Police Station of their inability to participate at the meeting. Hence, an opportunity was missed by the said group of persons to get their concerns clarified on DDO, the manner in which the member contributions will be guaranteed through the implementation of DDO and as to how an investment return at a minimum as it was given during the last several years to members of EPF will be given to them during the next few years as well by implementation of DDO,” the CBSL said. (Colombo/Aug29/2023)

Courtesy of EN

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