Bankrupt Sri Lanka’s hospitals were crippled and transport disrupted on Wednesday as trade unions protested against the doubling of taxes required to qualify for a crucial International Monetary Fund (IMF) bailout. The work stoppage, which involved more than 40 trade unions, forced schools to cancel term tests and led outpatient departments at hospitals to close. Fewer vehicles were seen on the roads, and the action proceeded despite a ban on strikes imposed by President Ranil Wickremesinghe last month, along with warnings that violators could lose their jobs.
Trade union spokesman Haritha Aluthge said talks with the authorities overnight ended inconclusively, prompting the unions to go ahead with Wednesday’s strike. Professionals have also joined the unions in opposing the sharp increase in income taxes that began in January. “Anyone who violates the essential services order will face the full force of the law,” cabinet spokesman Bandula Gunawardana warned ahead of the nationwide action, which also hit ports, post offices and utilities.
Unions say the strike’s duration will depend on the government’s response to their demand to reverse the new taxes, which are among the measures needed to qualify for a $2.9 billion rescue package from the IMF. The IMF’s executive board is scheduled to decide on Sri Lanka’s rescue package on 20 March. Officials involved in the negotiations said the IMF is closely monitoring the protests and social unrest triggered by the tax reforms. “Sri Lanka is one of the countries with the lowest tax revenues in the world. Unless state revenue is increased, there is no solution to the country’s economic crisis,” a Sri Lankan official told AFP.
Sri Lanka sought IMF assistance after defaulting on its $46 billion foreign‑government debt last April. Colombo received assurances last week from Beijing, its largest single bilateral creditor, that China is willing to restructure its loans to the South Asian nation and clear the final hurdle for the IMF rescue. In an open letter to Sri Lanka’s creditors, President Wickremesinghe stressed on Tuesday night that all creditors would be treated equally, addressing concerns that China might receive a better deal. “We reiterate our commitment to comparable treatment of all our external creditors, with a view to ensuring all‑round equitable burden sharing for all restructured debts,” he said.
Sri Lanka’s unprecedented economic crisis, which began in late 2021, has caused severe shortages of food, fuel and medicines and sparked months of protests that toppled President Gotabaya Rajapaksa in July last year. AFP.
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