Sri Lanka: A flood of strikes, the rising tide of floods, and worse, a drowning in despondency

It needs to be said that possibly the single most factor that exacerbates the frustration are the numerous social media platforms that circulates mostly negative information. In this regard, despite the failings in some areas, there are many positives that do not circulate as much as the negatives.

by Raj Gonsalkorale

The increasing degree of frustration amongst the younger generation in Sri Lanka is very disturbing. The young are increasingly disillusioned with the political system and politicians. They see many daily paid workers are without an income, and those receiving an income find the cost of living an unbearable burden. COVID no doubt is a culprit, but not the only one. Failure of economic and political management by successive governments have left many young people despondent and with no trust in politicians, and no hope for their future in Sri Lanka – A view expressed by a 20-year-old young man aspiring to be an accountant

This expression of frustration and despondency surely cannot be the view of one young person. The queues of people lining up to apply for passports is probably symptomatic of this frustration and hopelessness. The perilous state of the economy, the impact of the pandemic, and what the younger generation possibly see as double standards, one set of rules for some and another for others, and the inability or unwillingness of the system to bring to book large scale fraudsters who have robbed the country, have contributed to this frustration. 

Farmer protests linked to the fertiliser issue which is very close at heart for many young people in rural and semi urban settings, the teachers protest, which many see as a justifiable protest and an illustration of the indifference and duplicity of politicians on an issue that is decades old, have also fuelled the frustration further. 

Irresponsible use of Social Media

It needs to be said that possibly the single most factor that exacerbates the frustration are the numerous social media platforms that circulates mostly negative information. In this regard, despite the failings in some areas, there are many positives that do not circulate as much as the negatives. One hopes that the conventional media will redouble their efforts to bring these positives to the notice of the public while they engage in criticisms where such criticism is due. Youth frustration is a dangerous phenomenon and unless addressed, it could lead to very unfortunate consequences. Considering that there is a huge trust deficit between politicians and the general public, it is the media and nonpartisan commentators and analysts who should take the lead in accentuating the positives while criticisms are presented objectively. 

Destructive activity by humans

Sri Lanka is witnessing two phenomena never before witnessed in the scale and intensity it is unfolding before the people. One, a flood of strikes, perhaps even nurtured by unseen hands, and the other, nature’s reactive fury as a price for tampering with it. Both are in a sense human made, although one, the strikes, are short term events while the floods are consequences of long term destructive activity by humans.

Whilst not making a value judgement on whether the strikes are justified or not, they can be looked at from two prisms. On the one hand, they can be looked at from the point of view of timing, and whether this is the moment to undertake these strikes. Sri Lanka and the rest of the world is in an economic morass of unprecedented scale due to the pandemic and financially manacled as a consequence. Sri Lanka’s economic wellbeing is dependent on the health of the world’s economy, in particular, the economy of the countries to which it exports products and services, and from where tourists come to Sri Lanka.

While traditional exports are presently proceeding as before, if not even better during some months, tourist earnings and overseas worker remittances have virtually hit absolute rock bottom. Sri Lanka is almost bankrupt.

Need for restructuring of foreign debt

The country is borrowing from numerous Tom’s, Dicks and Harry’s just to survive for the day. This is stated not in any way to demean the givers of these loans and facilities as they are the life saving measures provided to the country at this difficult time, but, whilst painful in the short term, a longer term solution, which is an economic structural adjustment courtesy of the IMF has not been considered. 

Sri Lanka’s overall foreign debt has a short term, high interest component of some 46% of the total debt according to Central Bank data, and this is what is suffocating the country in these difficult times. A structural adjustment of the country’s foreign debt portfolio is needed so that debt is transformed into a long term, low interest debt that can withstand economic upheavals that are arising from worldwide phenomena like the Pandemic. Economic mismanagement and misjudged priorities are nothing new in Sri Lanka, and political pay back demands overtaking rational, long term thinking and decision making, has been facilitated by short term loans described above. Such debt is not subject to any conditions and affords governments to fund expenditure for short term political gains.

Contrary to the “Chinese debt trap” whipping tool that is proliferated in social media, the Chinese loan component of the total foreign debt portfolio is about 10% according to the same Central Bank data, and these loans are relatively long term, although not as long term or concessionary as IMF, World Bank and ADB loans. The Chinese loans are not suffocating the country. The short term, high interest commercial debt is.

IMF, the only option to prevent falling off the edge of the cliff?

History has shown that Sri Lankan governments of all persuasions have not been good economic managers, not due to an inability to do so, but due to the nature of politics in the country that is driven by short term imperatives. A degree of compulsion to rise above short term politics is perhaps what the country needs. An IMF package, however derided and disparaged IMF has been, is what the country needs in order to be forced to be more disciplined in economic management, as no political party will be able to do that when in government without some external compulsion as they will be catering to populism and short term policy settings with an eye on the next election.

Revenue raising measures needed will have consequences

In this dire economic settings, a valid question could be asked whether strikes are justified at this moment as the current government, or any other, would have had very limited options as to how they could meet the demands of striking personnel in the absence of earnings to meet such demands.A government does have some options in finding the money required for salary increases. It could look for income generating areas such as increasing taxes, and they could cut expenditure on some goods and services, infrastructure projects, agriculture projects, on education, health, security etc.They would yield an income that could contribute towards salary increases. However, all such options will have economic consequences as well, and some consequences could be counterproductive to the overall economic improvements such as job creation, social progress, health services improvements, and social development investments. A government will find it challenging to balance costs and benefits of such a move.

The government could print more money and add to the pile of money already printed running the risk of burdening the public with even higher prices due to a rise in inflation. The government could borrow more money internally, and externally, further exacerbating the foreign debt component as well as the total debt situation which invariably will result in additional burdens on the public as all such debt will have to be paid back at high interest rates.

From the point of view of those resorting to trade union action, they are fighting for what had been promised to them decades ago and not honoured by successive governments, as in the case of the teaching profession. Their position is that they have waited long enough and they are now not in a position to trust the “word” of any government, but will only be satisfied when they have the money in their hands. They cannot be blamed for this stand as it is successive governments that have failed them.

Restructuring economic settings

Irrespective of these strikes, the present government has to review their expenditure priorities, particularly their political administration expenditure and other items of expenditure that have a very low or no return on the investments being made. As the pandemic effects subside and a degree of normalcy returns, the government will have to take measures to link public expenditure to productivity, and get rid of non-productive ventures and non-productive staff.

On the other side of the ledger, the government will have to take measures to increase local income measures such as taxation. In particular, the high earning commercial enterprises and individuals will have to be called upon to pay higher taxes. Although it will be a highly unpopular and politically unpalatable move, income tax coverage should be extended to all workers irrespective of whether they work in the public sector or the private sector. Income tax should not be looked at purely as an income generator, but as a means of participation in the development of the country with every citizen having a stake in it.

Rising tide of floods – a wounded environment hits back

The rising tide of floodsis adding to Sri Lanka’s woes, and the effect on food production, and therefore food security is not known yet. Lives and livelihoods have been lost, and the rising floods could rise further.

The world is witnessing extremes in weather patterns as Sri Lanka has just witnessed. Climate change is real and deniers and sceptics, are doing a huge disservice to the earth and its inhabitants and it future generations. Unfortunately, pay back for destroying the environment that sustains all living beings is not selective and if affects everyone including the deniers and the sceptics. 

The Wikipedia says the following about climate change in Sri Lanka quote “ its effects threaten to impact both human and natural systems in Sri Lanka. Roughly 50 percent of its 22 million citizens live in low-lying coastal areas in the west, south, and south-west of the island, and are at risk of future sea level rise. Climate change also threatens the island’s biodiversity, including its marine ecosystem and coastal coral reef environments. Sea-level rise due to climate change has the potential to affect the overall abundance of endemic species. Sri Lanka’s coastal regions, such as the Northern Province and the Northern Western Province, are considered major hotspots and extremely vulnerable to climate change. These maritime provinces are the most densely populated. In addition to being a threat to Sri Lanka’s biodiversity, climate change may cause disastrous consequences on various levels in such areas. Such consequences include: Affecting agricultural productivity, causing natural disasters like floods and droughts, increasing the spread of infectious illnesses, and finally undermining the living standards.

Currently benefiting from the adaptation projects of building resilience, Sri Lanka is presented with strategies to help lessen the effects of climate change in these vulnerable communities. For example, it was suggested that Sri Lanka should increase non-agriculture jobs by 30 percent, enhance the level of education, and reduce the time to reach the market. These changes ought to be implemented together.

Ranked as the 4th most affected country by climate change in 2016, Sri Lanka’s vast majority of natural disasters are a result of climate variations. Consequently, it necessitates stronger disaster preparedness and proper interventions to build resistance in response to climate change’ unquote.

Sri Lanka cannot be the Ostrich with its head in the sand

Sri Lanka needs to redouble its effort to save the country by saving its environment and its climate, and has to do this by increasing forest cover, stopping unlawful and indiscriminate felling of trees and decimating forests. Laws relating to such activities should be strengthened and penalties increased. Politicians who are involved in the illegal logging trade should be barred from running for Parliament if they are found guilty of committing crimes against the environment. 

Sri Lanka could be serious about this or continue to pay lip service and suffer the consequences as witnessed, and still being witnessed throughout the country today. The country could continue to emulate an Ostrich and hide its head in the sand pretending its environment issues will disappear like a sand storm, or wake up to reality that even Ostriches will disappear and cease to exist if environmental destruction continues unabated.

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