Sri Lanka: The #GotaGoHome protest movement (plus interview: No agreement with the IMF!)

By Jayadeva Uyangoda

April 16, 2022 — Links International Journal of Socialist Renewal reposted from Social Scientists' Association — After 31^st March, 2022, Sri Lanka’s politics is no longer what it has been. It seems to have entered a qualitatively new phase. It is still too early to say anything definite about the true magnitude and future directions of this newness. Its basic character and dimensions, however, are quite clear. The ‘direct democratic’ action of the group of citizens who protested in front of President Gotabaya Rajapaksa’s residence in Pengiriwatte, Mirihana, has given rise to outcomes even they would not have quite anticipated. It has shaken the very foundations of an autocratic-authoritarian regime that was, up until now, perceived to be as strong as an immovable rock.

With that spontaneous action of citizen protest, a new people’s movement has emerged, openly demanding some fundamental changes in the existing political order. In a flash, it has brought into direct and passionate political action a hitherto silent and politically passive body of citizens from a wide range of social backgrounds. They are reclaiming their lost political agency as citizens. Shaking the foundations of the Rajapaksa government is something that the country’s political parties could not do for nearly three years. Yet, through their voluntary, spontaneous, and direct political action, Sri Lanka’s citizens have now done that. While insisting on the resignation of the President and the Prime Minister, and all the MPs in Parliament, it also demands some fundamental changes and transformations in the overall system of government in Sri Lanka.

Thus, this is a rare moment of Sri Lankan citizens’ political awakening. They are now asserting their public duty to the common good of the larger political community. Young citizens in large numbers are spearheading this new movement of resistance and political hope. This is Sri Lanka’s long awaited moment of democracy.

This marks an extremely important milestone of a process geared towards reviving and preserving democratic politics in Sri Lanka. Against a backdrop of the quality of Sri Lanka’s representative democracy in steady decline, the direct entry of citizens into active politics in an important intervention. It marks the inauguration of a new politics of critique, resistance, and democratic rebuilding in Sri Lanka. This is all the more significant at a time when traditional institutions of democracy such as Parliament and the judiciary have been mere onlookers of a steady decline of the country’s political life.

It is therefore essential to assess the importance of this movement in order to appreciate its political potential and strengthen its constructive outcomes.

Political dimensions

A second positive dimension has to do with the weakening and perhaps  dismantling of the ideological hegemony so far maintained by the Rajapaksa government and their Sinhala nationalist cronies. This owes largely to heightened political consciousness on the part of citizens. The communalist ideological control that the Rajapaksas had established over the Sinhalese society has close parallels with India under Narendra Modi and the Bharatiya Janata Party (BJP). Sri Lanka’s citizens have set an example for the Indian citizens too to return to their democratic, secular, and multi-cultural roots, breaking up the ideological straitjacket of ethno-religious communalism. The morning following the Mirihana protests, the President’s Media Office attempted to arouse Sinhalese communalism by making direct parallels with the ‘Arab Spring.’ It failed. Not only do citizens at the protests not use communally divisive slogans, they also denounce the deployment of such reactionary ideologies. Thus, the present protest movement is not only multi-class, but also multi-ethnic, multi-cultural, and diverse in its social bases and ideological orientation.

This signals another important feature of the present moment: the economic and political crisis has opened up new space for building a ‘democratic public’ with a political consciousness transcending ethnic and religious communalism. The demos of Sri Lanka have returned, reclaiming their place in the country’s politics, challenging the corrupt political oligarchs.

Fourthly, the protests highlight the message that the decaying political system including the specific form of democracy we have, needs far reaching reform, and the country’s government and political structures as well as institutions need refashioning. Citizens have also lost trust in the undemocratic political institutions as well as the greedy, corrupt, inept, and unreformable authoritarian political elites. The present wave of protests by the citizens embodies a mixture of political reactions to this state of affairs—disillusionment, despair, loss of trust, anger, and of course political hope for a fresh beginning. That is why Sri Lanka’s citizens have now decided to take democracy into their own hands through direct political action.

Fifthly, the citizens’ protests that spontaneously began to erupt throughout March 2022 should not be viewed as an isolated development despite their suddenness. They are the culmination of a series of protests against the government that broke out throughout last year. Tamil citizens of the North seeking justice, rural farmers expressing anger against the President’s fertilizer policy, and the public sector teachers and plantation workers demanding higher wages inaugurated different phases of this wave of citizen resistance.hen came sporadic protests – evening candle-light vigils -- by urban, middle class citizens at road intersections in Kohuwala, Ratmalana, Rajagiriya, Pita Kotte and in a few towns outside Colombo. What seems to have really tested the patience of Sri Lankan citizens during the past few weeks is the absolute failure of Sri Lanka’s President and his government to ensure the basic everyday survival needs of the people – electricity, cooking gas, diesel and petrol, food and essential commodities, regularly and at reasonable prices. The Rajapaksa administration’s failure to govern is also its failure to run the State, an elementary duty of an elected ruling class. It pushed the Rajapaksa regime into an unprecedented crisis of legitimacy, seriously damaging its moral right to rule, despite the veneer of constitutional legality it still commands. The inability of the rulers to empathise with the suffering of the people caused by their own misrule, is obviously what transformed people’s sense of despair and torment into collective political anger and direct action. In fact, the month of March led to a moment in which the people of Sri Lanka saw an irreparable breach of the symbolic social contact between the rulers and the ruled.

Finally, the citizens’ direct action is not merely a protest movement. Slogans and demands of the ‘protestors’ carry alternative visions and ideas of politics, democracy, and governance. They call for re-inventing Sri Lanka’s parliamentary democracy in such a way that the Parliament, the electoral process, and cabinet government are freed from the debilitating control exercised by the corrupt political class and their bureaucratic, business, and nepotistic cronies. They are also demanding political parties to begin to represent the interests of the Sri Lankan people, and not their financiers, political brokers, corporate allies, or family members. They seek a Parliament and a new generation of parliamentarians who will honour the people’s expectations for a genuinely democratic political order in which politicians are accountable to the people and directly answerable to their electors.

Thus, the call for such fundamental reforms to be affected to Sri Lanka’s decayed system of politics and governance is no longer confined to radical Left-wing or civil society groups who traditionally raised such issues in the public domain. It is now part of a powerful democratic call by young citizens too. The people rejecting those parties and leaders that do not meet their reform expectations. The citizens of our society are demanding that political parties and leaders abandon the old cultures of electoral politics sustained on false promises, ideological manipulation, patronage networks, and ethno-religious communalism. Unless political parties reform and reinvent themselves, it would now be difficult for them to regain credibility, legitimacy, and even relevance.

In short, the doors have been opened to re-invent democratic politics in Sri Lanka, to usher in a qualitatively new stage of political development. The old order and its custodians are under severe pressure to give way to a new one. This is the most important message of the citizens’ political activism, with the youth at its core, that emerged on the evening of March 31^st. In the past too, Sri Lanka’s youth have spoken politically, but not in the language of democracy. This time around, the youth are speaking politically, in the language of democracy, peace, and pluralism. Silently, they seem to have inherited and internalised, and saved for the appropriate moment, the finest legacies of Sri Lanka’s democracy and democratic modernity.

The challenge now is to continue to keep those doors open, nourishing the citizens’ struggle, and work to ensure that a process of political transformation is set in motion. This is a serious affair, and one that urgently requires discussion and debate. The remainder of this essay is devoted to laying some groundwork for such a discussion to take off.

Agency to resolve the crisis

It is true that those who were part of the problem cannot be part of the solution. Yet, the question remains: who has the agency to provide and champion solutions through a reform programme? Can the protesting public do it on their own, without an organisational arm or some form of minimum institutionalisation of their campaign? Shouldn’t a broad coalition of citizens and citizens’ associations emerge to take the struggle forward? These are questions that cannot be ignored by the citizens who participate in the campaigns and its well-wishers as well.

The signs at present are that the protest campaign will intensify in the coming days and weeks, with increasing numbers of citizens joining it. Power cuts, shortages of gas, diesel, petrol, kerosene, food and medicine, rising inflation, falling living standards, and arrested education of children will continue to haunt public life in the months to come. Solutions to the current economic crisis, which the government is likely to implement in partnership with the International Monetary Fund, will most likely have the potential to further hurt Sri Lanka’s poor, the working people, and the middle classes. No easy resolution of Sri Lanka’s grave economic crisis is even conceivable. Moreover, while the government is incapable of resolving the political crisis, not much can be expected from the other political parties either. This will lead to renewed frustration and anger on the part of the public, more aggressive protests, and greater potential of the protests spreading to other cities.

In other words, it is inevitable that there will occur, in the coming weeks, a sharp polarisation of forces, with an angered and politically fired up public on one side and an isolated government with diminished legitimacy to rule on the other.

There is also an on-going political deadlock marked by a protracted contestation between a regime which has lost its legitimacy to rule and a parliamentary opposition with no parliamentary strength to replace the regime. The main opposition parties – Samagi Jana Balavegaya (SJB), the United National Party (UNP), and the Sri Lanka Freedom Party (SLFP) and Tamil National Alliance (TNA) – hardly have anything new or imaginative to contribute to finding a way out of the deadlock. They equally lack credibility or legitimacy among the protesting citizens. Can these opposition parties in the political mainstream do anything different from their parliamentary politics as usual in order to initiate a dialogue with the protesting citizens?  It is indeed quite difficult for the protesting citizens and the mainstream opposition parties to build trust and discover a language of dialogue. What is likely to happen is the shifting of the sympathies and loyalties of many rank-and-file members and voters of these parties to the emerging citizens’ force.

Among the parties in Parliament, the one with at least a slight chance of winning public trust is the  Janatha Vimukthi Peramuna (JVP). However, if the JVP leadership continues to play it safe without deciding on a politically strategic stance at this juncture, they too might find themselves isolated from the protesting public. They have to make sure that their support for the citizens’ struggle is not linked to their electoral agenda.

Thus, there is some measure of discomfort and tension in the relationship between the citizens’ protest movement and the opposition political parties. It is due to the fact that the new movement has sprung up totally independent of the parties and is even rejecting the kind of politics that the latter have been identified with. This is not surprising in view of the fact that during the past year or so there has been a sustained conversation among some sections of the Sri Lankan citizens on the need for a broad, non-party and inclusive democratic movement of citizens to take the sporadic people’s struggles for social and economic justice forward. That movement has now emerged with no prior warning.  The opposition political parties will be under pressure to reform or perish in the face of a new democratic challenge for which they have not been prepared.  The JVP seems to be feeling this pressure quite intensely.

A conundrum to overcome

The same question re-emerges as follows: whether the President, Prime Minister, and the Cabinet resign or not, a political vacuum will certainly emerge in the coming days, because there are now two centres of power in the country; (a) the President, Cabinet, and Parliament, and the security apparatus on one hand, and (b) citizens in protest, occupying the Galle Face, and demanding the resignation of the President, Prime Minister, and members of the ruling family, on the other. Does a presently voluntary and spontaneous citizens’ movement have the capacity to step in to fill the inevitable political void? Is it necessary to think of a new kind of transitional, interim arrangement, until a new political order is born democratically and peacefully?

The point here is that the question of political power is certain to pose itself sooner or later. In his public address the other day, Prime Minister Mahinda Rajapaksa hinted at the question of political power a few times. Being a leading member of Sri Lanka’s ruling class for a long time, Prime Minister Rajapaksa has sensed that what is at stake at present is political power. The protesting citizens have also been raising that question indirectly and unintentionally, and perhaps not as part of a conscious political strategy. The choice before the citizens’ movement now is the classic conundrum faced by social movements seeking political change: to remain an unconscious tool of history, or to be a self-conscious agency of political and social change?

The JVP’s dilemma

The JVP also finds itself facing a dilemma in the face of on-going protests. The protests started independently of the JVP, and perhaps without even the JVP’s knowledge. The party has publicly claimed on a number of occasions that it had no affiliation with the protests and protestors. It is clear that the JVP has been over-cautious about the possibility of agents provocateurs engineering violence amidst protest action in order to pin all blame on the JVP and justify a crackdown by the State. Such an acts or acts would eliminate the dual threat of both an angry citizens’ movement and a rising JVP.

However, standing aloof from the protests will be politically costly for the JVP. One option before them is to positively respond to the critique of the dominant political order that the protesting citizens have been advancing and reform their politics, programme, and vision accordingly. The JVP now has the exciting option of learning the art of solidarity politics with movements that emerge outside their own template of radical politics, and forming transformative political alliances. This suggestion applies to the Frontline Socialist Party (FSP) as well, which has of late adopted a policy of openness towards alliances with other Left parties. The FSP seems to have worked out a flexible strategy to work in solidarity with the protesting youth constituencies.

The fact that the protesting public is rejecting all 225 in Parliament has difficult implications for the JVP. It should accept the political symbolism of that call. It denotes the frustration, sense of betrayal, and the anger the citizens have been expressing towards the political elites, parliamentarians, parliamentary democracy, institutions of representative democracy, and the decadent political institutions and political class. All parties including the JVP need to listen to the public critique of them, and reform accordingly. Anyone who does not, might have a rough future ahead.

The citizens’ movement, on the other hand, should ask itself two further questions: the first is whether it can, singlehandedly, resolve the political crisis it has exposed so powerfully? The class/social basis of the movement is the middle class. It is true that this class has become politically active and influential. However, it needs to ask itself a second – related – question of how it can link with the majority of the politically active people’s groups in the country: farmers’ associations, workers’ unions, professional groups, women’s groups, student movements, and the people of the North and East all of which are organised entities for social-political action. If the movement rejects established political parties, a very constructive option available is to work together with movements that have a long history of struggle against injustice and for citizens’ rights.

Obviously, the time is now ripe for a broad coalition of progressive and democratic citizens’ movements and communities in Sri Lanka. Its core constituency will certainly be the protest movement of citizens. Such a coalition will be able to address the question of political power, which has begun to enter the on-going political contestation between the government and the citizens.

The citizens’ movement will have to confront these difficult questions in the coming weeks. They are unavoidable; they require deep reflection and discussion leading to solutions as well as alternatives. This will invariably enable the citizens’ movement to move forward with greater conceptual and ideological clarity about its goals, directions, and strategies.        

Jayadeva Uyangoda is emeritus professor of Political Science at the Department of Political Science and Public Policy, University of Colombo.

Sri Lanka: No agreement with the IMF!

Eric Toussaint interviewed by Sushovan Dhar

April 15, 2022 — Links International Journal of Socialist Renewal reposted from CADTM — A Sri Lankan delegation will travel to Washington next week to try to secure up to $4 billion from the International Monetary Fund and other lenders to help the island nation pay for food and fuel imports as well as stem defaults on its debt. The last time the IMF provided loan to Sri Lanka in 2016, the loan was capped at $1.5 billion and the program ended prematurely after disbursing $1.3 billion. This was at a time when the economy was growing at about 5 percent and tourism contributed a similar percentage of gross domestic product.

However, IMF and World Bank loans have always been surrounded by serious controversy. Critics believe that the World Bank and IMF have systematically lent to states to influence their policies. External debt has been and continues to be used as an instrument to subordinate borrowers. Since their creation, the IMF and the World Bank have violated international human rights covenants and have not hesitated to support dictatorships.

In an interview with Sushovan Dhar, Eric Toussaint highlights the potential risks of an IMF bailout...

Sushovan Dhar: As you know, the Sri Lankan government has announced a default on its debt. What do you think about this?

Eric Toussaint: The Sri Lankan government’s decision to suspend the payment of the foreign debt from Tuesday, April 12, 2022, shows how far it has stumbled. The Sri Lankan working people have been on the streets for more than a week protesting against rising prices and anti-social measures. All members of the government resigned except the fact that the Prime Minister and the President remained in office. It is important to note that the Prime Minister and the President are brothers, which is an important factor in understanding how the political system works in Sri Lanka. It is an ultra-neoliberal government, completely in favour of the interests of big business - both domestic and foreign. It is in an attempt to placate the population and also because there is not enough money left in the state coffers and in the foreign exchange reserves that the government has been forced to suspend payments.

In reality, since at least the beginning of the coronavirus pandemic, the debt payments should have been suspended in order to reallocate government spending to tackle the effects of the pandemic, protect the population from the virus and invest in the economy in order to deal with the global economic crisis accelerated by the pandemic. On the contrary, since the beginning of the pandemic, the government has been determined to continue paying off the debt. The debt has continued to mount because the government has financed with new debt a series of measures it was taking to deal with the crisis. It has also used new debt to repay old debts when, as I have just said, it should have suspended the payment of the debt.

A people’s government would have suspended debt payments on the grounds that the decision was prompted by external shocks that required the country to protect its citizens. In doing so, the government would have used arguments under international law to avoid paying interest on arrears. Such a people’s government would have had to combine the suspension of debt repayment with an audit of the debts reclaimed to Sri Lanka and the policies pursued by the Sri Lankan political ruling classes. An audit with citizens’ participation to identify illegitimate debts and the responsibilities of senior officials and leaders in the accrual of illegitimate and unsustainable debt.

On the basis of the audit of the debt, linked to a suspension of payments, a policy of repudiation of the debt should have been pursued. This should have been done, I repeat, within the framework of a new government, since it is the current government that, by following the neoliberal logic, is responsible for the continued accumulation of illegitimate debt.

Sushovan Dhar: In the current circumstances, where foreign exchange reserves are extremely low, the government says it has no choice but to borrow from the IMF. What are we to make of this?

Eric Toussaint: Let’s return to the decision made on Tuesday, April 12, and analyze it in a very critical way. Why? Well, firstly, it was taken in consultation with the International Monetary Fund (IMF) and large private creditors like BlackRock. That is, it was in the interest of the creditors that the government suspended the payment. Secondly, it announced that it would agree to pay the interest in full and that its desire was to resume payment of the debt as soon as possible.

Thirdly, the government, in negotiating with creditors, including the IMF, will seek an emergency credit to be able to guarantee the resumption of debt repayment to the IMF, to private creditors and to other creditors. So Sri Lanka will take on new debts to pay off old ones, many of which are illegitimate.

The fourth point of my criticism is that once the government enters into an agreement with the IMF, the IMF will demand fiscal austerity measures that will inevitably make the working classes pay for the adjustment effort and the budgetary austerity effort.

The government with the support of the IMF will try to obtain a reduction in the stock of debt owed to private creditors. This is usually what happens in these circumstances and it is what has happened over the last three years in Argentina. With the “help” of the IMF, the Argentine government renegotiated the debt with private creditors and obtained a very small reduction in the payments to be made. In doing so, it tried to re-legitimize the debt that was illegitimate and should not have been paid. This is what the current Sri Lankan government is about to do and therefore one can only disagree strongly with its strategy.

Sushovan Dhar : If Sri Lanka suspends payment of its debt, wouldn’t that be illegal under international law?

Eric Toussaint: I have explained what should have been done at the beginning of the coronavirus pandemic. Now let me turn to what should be done today, instead of what the government is doing. Yes, we need to suspend the debt payments. We must use a series of arguments based on international law, and the justification must not be limited to saying that we do not have enough money to pay. A government that really wants to act in the interest of the population should announce that it is suspending the payment of the debt because there are external shocks that do not depend on Sri Lanka, that reduce the income to the state coffers. External shocks force the country to suspend the payment of the debt. In such circumstances, this suspension cannot lead to an accumulation of interest on arrears, contrary to what the government says. A country like Sri Lanka has the right to suspend debt payments if there are good reasons to do so, including a fundamental change in circumstances. International law allows a country to declare itself in the suspension of payment without its creditors being able to demand the payment of interest on arrears afterwards.

Secondly, an audit of the debts should absolutely be carried out. We must audit the debts issued on the international markets. The holders of these debts must be forced to come forward by a sovereign decision of Sri Lanka. Therefore, the secrecy of the identity of the holders of securities should not be accepted. The audit must also cover the debts claimed by the International Monetary Fund and the World Bank. Here it is absolutely clear that the policies recommended by these two institutions are largely responsible for the accumulation of illegitimate debts and the application of an economic model that has led the country and the people to disaster. It is very clear that the IMF and other international bodies support the country’s corrupt, authoritarian authorities, which are in place because they serve the interests of domestic and foreign big business. China, India, and Washington are so far in favour of keeping this regime in place because it serves the interests of foreign capital and big foreign powers. The local ruling class, which is largely parasitic, also wants the regime to remain in place. This regime does not respect democratic rules, implements anti-social policies and faces clear popular discontent.

The debt audit must be carried out with the participation of social movements. It must result in determining which part of the debt is illegitimate and should not be paid. Generally, the commentators of the Sri Lankan situation, the mainstream press, say that the situation is dramatic because the value of Sri Lankan securities is falling very sharply on the secondary debt market. The secondary debt market is where the holders of Sri Lankan sovereign debt, which could be BlackRock and other investment funds, but also banks, are selling or buying them back. Sri Lankan securities are currently selling at a discount, if I am well informed, of around 60%. Contrary to the idea that the mainstream media is trying to convey, the fact that there is a very large discount on Sri Lankan securities is not at all bad news for the Sri Lankan people or for the working classes. What it does show is that bondholders are worried. They are not sure whether the government will be able to continue to repay the debt, and so this is a good time to cause an even greater fall in the value of the bonds because it would allow a new government to buy back these bonds on the secondary market at a very low price while the payment is suspended. This is what the government of Ecuador did in 2008-2009 and it was beneficial for the country and for the people.

Sushovan Dhar: What is the way out of this debt trap for Sri Lanka or any other country?

Eric Toussaint : What I have just said is in contradiction to the strategy of the government. The government wants to get a loan from the IMF to resume debt payments to the bondholders and sit down at the negotiating table with them and ask them to reduce the value of the bonds by 10 to 20 per cent when it could be reduced by 80 per cent which would be much better for the country. If Sri Lanka resumes payments with the money that the IMF will lend it, the bondholders will be in a strong position. Whereas if Sri Lanka does not take the IMF money and remains sovereign, if it refuses the austerity policies that the IMF is about to mandate, if it continues the suspension of debt payments, it would be in a strong position to demand the bondholders to sell their bonds back to the government at an 80% discount. This is the kind of policy that was followed by Ecuador in 2008 and that resulted in a victory for Ecuador in 2009. There, Ecuador had bought back these securities with a 70% discount but they had bought back on the secondary market part of the securities with an 80% discount, so the discount had been very important. Given the severity of Sri Lanka’s situation, with this suspension of payment, they could get a very large write-off on the securities. But I don’t think that’s possible with the current President and Prime Minister: they are not at all ready to apply this kind of measure, so the question is not just what measures to take, it’s who can take these measures? It is a question of popular mobilization. The popular classes should give themselves a new legitimate government and this new government should apply a policy that is totally in line with the interests of the overwhelming majority of society.

If this does not happen in the short to medium term, Sri Lanka will be faced with a debt burden that will increase because of the new loan from the IMF and other loans that Sri Lanka is taking from India, China or other creditors. So Sri Lanka, following the policy of the Prime Minister and the President of the Republic, is going to sink into a permanent and vicious cycle of indebtedness. The adverse effects of the neo-liberal policy will further deepen the fragility of its economy and worsen the living conditions of the majority of the people.

Sushovan Dhar: What do you think of the position taken by around a dozen Sri Lankan economists who claim to be independent ?

Eric Toussaint : This group of around a dozen economists who call themselves independent have published an op-ed in the Sri Lankan press explaining their vision of what should be done and all the points that are indicated correspond exactly to the type of policies demanded by the International Monetary Fund and the World Bank. One can take their proposals point by point, analyze the agreements made with the various countries, including Sri Lanka, with the IMF and observe that the measures proposed by these so-called independent economists are precisely in line with the nefarious policies that the International Monetary Fund wants.

What these economists propose is also perfectly in line with the interests of the big private creditors, moreover, they suggest calling upon private firms specialized in debt restructuring. These private firms work on behalf of large private creditors and are not at all in the interest of the people who live in the countries forced to pay illegitimate debts. Thus, these private firms offer no safeguards in defending the interests of the people of Sri Lanka.