Measures to secure IMF bailout fuels protests in Sri Lanka

Colombo, Mar 9 (EFE).- Discontent on the streets of Sri Lanka has been on the rise over rising taxes and fuel and electricity prices, as a part of the government’s measures to comply with the requirements for a financial bailout from the International Monetary Fund (IMF).

Amid this growing unrest, hundreds of people staged a protest on Thursday against a recent 66 percent increase in electricity prices, which came into force on Feb.15.

“The government must reduce the electricity prices. Our income is less, prices of goods have increased, and we can’t afford anything extra,” organizer of the protest and Ceylon Teachers Union’s general secretary Joseph Stalin told EFE.

This increase in prices, along with several other measures, have been taken by the government to increase the nation’s revenue as a part of the conditions for the approval of the IMF bailout.

Another unpopular measure, announced weeks ago by President Ranil Wickremesinghe, was the restoration of taxes abolished by his predecessor, Gotabaya Rajapaksa.

This has meant increased obligations for citizens who already face much difficulty in managing their daily expenses amid the economic crisis.

The government has been trying to stay afloat while trying to meet the IMF’s recommendations that will allow it access to a $2.9 billion line of credit, which has been largely negotiated and has been awaiting final approval for months.

However, the people of Sri Lanka face greater pressure in meeting their daily necessities with each new step taken by the government to secure financial aid, especially in the face of steep inflation that exceeded 54 percent in January.

“I think we need to find an alternative for this issue because going to IMF means taking away

social protection from already marginalized communities. In addition, we will be taking on

new debt,” social activist Ruki Fernando told EFE, expressing skepticism over the government’s measures to find a way out of the crisis.

These measures include tax reform, increased fuel and electricity prices, privatization of companies, and substantial cuts in public spending.

The crisis that the island nation has been experiencing for more than a year is attributed in part to erroneous fiscal policies, and a very high foreign debt, accentuated by the fall in foreign exchange revenues during the coronavirus pandemic.

The south Asian nation has a debt of about $6 billion annually for the next five years, ten times more than the foreign exchange reserves currently in its coffers. EFE

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