Sri Lanka unions stage strike to protest against IMF bailout plan.

Recently, unions in Sri Lanka went on strike to oppose the International Monetary Fund’s IMF bailout strategy. In exchange for Sri Lankan economic reforms and austerity measures, including cuts to public sector wages and pensions as well as higher taxes on petrol, alcohol, cigarettes, and other items, the IMF had proposed a three-year loan package of $1.5 billion. Trade unionists are outraged, claiming that this will only make things worse for the nation’s already-struggling workforce. 

The Ceylon Mercantile Industry & General Workers Union CMU, the Free Trade Zone & General Services Employees Union FTZGSEU, the Government Nursing Officers Association of Sri Lanka GNOSL and the Inter Corporate Employees’ Union were among the key labour unions that coordinated the strike ICEU. They are requesting 

In order to protest the high-income taxes imposed as a condition for a crucial International Monetary Fund (IMF) bailout, trade unions crippled hospitals, ports, and banks on Wednesday. Sri Lanka responded by deploying armed troops. 

Due to the work slowdown that encompassed more than 40 trade unions, schools cancelled term tests and outpatient departments at hospitals shuttered. There were fewer vehicles on the roadways. 

Dockers at Colombo’s main seaport remained away as air traffic controllers joined a two-hour “go slow” strike, in which at least 14 international flights were impacted. 

All things considered, our job to rule lasted only two hours, but Mr Rajitha Seneviratne, secretary of the air traffic controllers’ group, warned that if the government does not reverse the increased tax rates, they may contemplate a full-fledged strike. The administration attempted to restore the bare minimum of services by stationing armed soldiers at ports and railway terminals.

There were no reports of any fights despite the tension between the soldiers and the dock workers at the port. notwithstanding union claims to the contrary, the office of President Ranil Wickremesinghe said that 20 trains ran every day to transport office personnel to the capital.

The President’s office reported that state-run buses were also running, but few of them were visible on the roadways and Wednesday saw a substantial decline in the number of students, employees, and factory workers. The strike took place despite Mr Wickremesinghe’s ban from February and his threats to fire anyone who broke it. 

According to the trade union’s spokesman Haritha Aluthge, talks with the authorities overnight concluded without a resolution, forcing them to proceed with the work stoppage on Wednesday. together with the unions, professionals are protesting the substantial rise in income taxes since January. The full power of the law will be used against anyone who violates the critical services directive, Cabinet spokesman Bandula Gunawardana had warned prior to the widespread action. 

The length of the strike, according to the unions, will depend on how the government responds to their demand that the new taxes be repealed. The new taxes were one of the steps taken to earn a US$2.9 billion (S$3.9 billion) rescue package from the IMF.

The executive board of the Washington-based lender is anticipated to approve the first tranche of a nine-tranche loan worth US$2.9 billion spread over four years when it makes its decision on Sri Lanka on Monday. 

IMF has been closely monitoring the protests and social discontent since the tax cuts, according to those participating in the negotiations. Sri Lanka is one of the nations in the world with the lowest tax collections. There is no way to resolve the nation’s economic predicament without increasing public revenue, a Sri Lankan official told AFP. On March 18, 2022, Sri Lanka publicly requested assistance from the IMF after going into default on its US$46 billion foreign government debt in the middle of April. 

The largest bilateral creditor, China, gave Colombo assurances last week that it was ready to restructure its debt to the South Asian country and remove the remaining barrier to the IMF rescue. After worries that China would obtain a better deal, Mr Wickremesinghe emphasised in an open letter to Sri Lanka’s creditors on Tuesday night that all creditors would be treated similarly.

The speaker stated, “We underline our commitment to equal treatment of all our external creditors, with a view to ensuring all restructured obligations are burdened fairly overall. Since late 2021, a severe lack of food, gasoline, and medical supplies has been caused by Sri Lanka’s unheard-of economic crisis. After several months of demonstrations, president Gotabaya Rajapaksa was overthrown in July last year. AFP

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