August 10, 2022

Sri Lanka Is “Grinding to a Halt” Amid Fuel Shortage, Inflation & Austerity, Prompting Mass Protests

6 min read

This is a rush transcript. Copy may not be in its final form.AMY GOODMAN: This is Democracy Now!, democracynow.org, The War and Peace Report. I’m Amy Goodman, with Nermeen Shaikh, as we go now to the island nation of Sri Lanka, where protests are escalating amidst a growing economic crisis and gas shortage faced by some 22 million people, many forced to wait for days and nights in long lines for fuel.

SRI LANKAN MAN: [translated] When the petrol problem came up, I tried to use WhatsApp group chats to check where petrol was available, but that was not practical. First it was two or three hours in a petrol queue. Then it was four, six and up to eight hours. About three weeks ago, I was in a petrol queue for three days.

AMY GOODMAN: Police fired tear gas and water cannons at hundreds of demonstrators near Sri Lanka’s Parliament Wednesday as they called for the president, Gotabaya Rajapaksa, to step down.
Sri Lanka’s government has forced the country’s schools to stay closed for another week because there’s not enough gas for students and teachers to travel to school. Authorities also announced plans to cut electricity by up to three hours a day because Sri Lanka doesn’t have enough fuel. Sri Lanka’s president said Wednesday on Twitter he had reached out to Russian President Vladimir Putin and, quote, “requested an offer of credit support to import fuel.”
Meanwhile, Sri Lanka is also facing a dire shortage of food and medicine, and doctors are saying the country’s entire health system could collapse. On Tuesday, Sri Lanka announced it will stop printing money, as inflation is expected to reach a record 60% this year.
For more, we go to the Sri Lankan capital of Colombo to speak with Ahilan Kadirgamar. He is political economist and senior lecturer at the University of Jaffna in Jaffna, his recent op-ed for the Daily Mirror headlined “When they can’t govern, they must Go Home.”
Welcome back to Democracy Now! Can you start off by explaining the extent of the issue and the significance of Sri Lanka saying it’s turning to Russia for support to get fuel?
AHILAN KADIRGAMAR: Thank you for having me, Amy.
The situation from week to week has been deteriorating. Over the last six months, Sri Lanka was going into a major downturn. But in the last three months — and we’ve had a new prime minister in power since May 11th. And even in those few months, as Sri Lanka has been preparing to go for an IMF agreement debt, an IMF team was in Sri Lanka for two weeks. The last two weeks, an assistant secretary of the U.S. Treasury and assistant secretary of the state from the United States were here visiting. Very high officials from India were here. But no deal was made, and now Sri Lanka is in a very dire situation. Even the World Bank and the IMF expect Sri Lanka’s economy to shrink by anywhere from 6 to 8%. That is negative GDP growth of, in my view, probably over 10% this year. So, it’s — farmers have stopped cultivating. Fishermen can’t go to the sea, because they don’t have kerosene oil. And our entire informal sector — 60% of our economy is the informal sector — has come grinding to a halt because of fuel shortages.
And the people are blaming President Gotabaya Rajapaksa and Prime Minister Ranil Wickremesinghe for the continued economic crisis that they are facing. And it’s in that context there is likely to be a very powerful wave of protests starting this Saturday. They saw that two months ago when the president’s brother, Mahinda Rajapaksa, resigned as prime minister. Now, day after tomorrow, there’s going to be very massive protests calling for the resignation of the president and prime minister. And it’s in the context of this wave that the president is also desperately asking various actors, including President Putin of Russia, to provide oil, to try to pacify the masses here in Sri Lanka.
NERMEEN SHAIKH: Ahilan, could you talk about how the government has so far responded to these protests? And also, a piece that you wrote earlier this week, headlined “When they can’t govern, they must Go Home,” in which you point out that “The ideology of our ruling class” — namely, Sri Lanka’s ruling class — “for decades has been one of solving all our problems from food security to people’s livelihoods by importing.” Now, what does that have to do with the scale of the crisis right now, the fact that Sri Lanka was so heavily dependent on imports?
AHILAN KADIRGAMAR: Sri Lanka was the first country in South Asia to liberalize its economy, way back in 1977. You know, this was even well before the election of President Reagan and Prime Minister Margaret Thatcher. Sri Lanka was put on the neoliberal path with structural adjustment policies of the IMF and the World Bank.
And some of the things that we [inaudible] including in agriculture, which meant that we became even dependent for food in terms of imports. A lot of produce that could have been produced here, whether it’s milk foods, whether it’s vegetables, all of these started to be imported. And it started an economy that was very much even more dependent on the external sector. And that has been further accelerated after the long civil war in Sri Lanka, which ended in 2009, with excessive borrowings in the international financial markets, what are called sovereign bonds.
So, this dependency and this idea that we can import our way out through debt has continued to this day. I would argue, even now, over the last four months, the government thinks that the solution to all our problems is to go for an IMF solution, IMF agreement, and as if the IMF can come into Sri Lanka and completely restructure the economy and make everything fine. In other words, there is no discussion on the part of the government on how we as Sri Lankans are going to come out of this crisis, how we are going to address the great inequalities in this country. But instead, they’ve been implementing austerity measures over the last three, four months, which have made the burden on the people that much more harsher.
So, at the core of this is the class question, in terms of who has benefited from these imports and this inflow of global finance, and who is asked to pay for it now as the cost of living — if you take the price of bread, it has tripled over the last six months, but the incomes and livelihoods of working people have declined or are increasingly disrupted. And that —
AMY GOODMAN: Ahilan — go ahead.
AHILAN KADIRGAMAR: In that context, as people go out on the streets and they start protesting, the police has become increasingly repressive. They are targeting protesters and arresting them. Students have been in the lead of protests, particularly university students. They’ve been tear-gassed. And it’s to be seen what would happen on Saturday, when another big wave of protests are to be launched in Sri Lanka, throughout the country and particularly in Colombo, pressuring the president and prime minister to resign, what the military and the police will do in that context.
The demand now is for both of them to resign and for an interim government to be formed to be able to stabilize the country economically and politically, and also to bring about a people’s council, with representatives of the people, of the protesters, of professional organizations, to be able to stabilize the country until we can have elections and move forward.
AMY GOODMAN: Ahilan Kadirgamar, I want to thank you for being with us, political economist, senior lecturer at University of Jaffna, usually in Jaffna but right now in Colombo. We’ll link to your piece in the Daily Mirror, “When they can’t govern, they must Go Home.”