Sri Lanka‘s government said on 28 February it was banning strikes in several key sectors as its economic crisis continues. The move comes a day ahead of a planned one-day national stoppage called by unions to protest painfully high taxes and utility bills.
Anger towards president Ranil Wickremesinghe is growing. His government has slashed spending and hiked taxes to secure an International Monetary Fund (IMF) bailout after more than a year of economic and political upheaval.
Wickremesinghe’s office said he used his executive power to invoke an “essential services” order. The order effectively outlawed the planned trade union strikes. A statement said he declared:
Anyone defying the essential services order risks losing their job.
Sri Lanka’s government has raised energy costs threefold in line with demands by the IMF. It made this decision to reduce losses of state utilities in order to qualify for a $2.9bn rescue.
Sri Lanka sought help from the IMF after defaulting on the country’s $46 billion in external debts in April 2022. However, the IMF is yet to unlock the funds. It is awaiting financial assurances from China that it is willing to take a ‘haircut’ – a loss in value – on loans to the South Asian nation. China is the largest single bilateral creditor of Sri Lanka.
Sri Lanka bankrupt until 2026
Sri Lanka’s has faced an unprecedented economic crisis since late 2021. BBC News explained in July 2022 that the crisis is likely the result of misspending by former president Gotabaya Rajapaksa since the end of the Sri Lanka’s civil war in 2009. The government itself, though, blamed the Covid pandemic and a 2019 terrorist attack damaging the country’s tourism industry.
Either way, the crisis has led to severe shortages of food, fuel, and medicines. It also led to months of protests that toppled Rajapaksa in July 2022. A general election led to Wickremesinghe replacing Rajapaksa. Wickremesinghe has since said the economy contracted by 11% in 2022, and that Sri Lanka will remain bankrupt until at least 2026.
He also announced that the country did not have money to finance a local government election, which they’d originally scheduled for 9 March. This decision has prompted accusations that he was using the economic crisis to stifle democracy. Footage shared by Sri Lankan news outlet Newswire showed police allegedly tear-gassing crowds protesting on 27 February the decision to halt elections. An estimated 10,000 people took to the streets of the capital Colombo during the protest.