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By Shyamika Jayasundara-Smits
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Last year, Sri Lanka faced its worst economic crisis to date, accompanied by political upheaval that left its population reeling as they struggled to make ends meet. In this article, Shyamika Jayasundara-Smits briefly outlines how things played out in 2022, showing that while the crisis has had a devastating impact on the country’s stability and prosperity, 2023 signals a time for action – and change.
Sri Lanka entered 2022 beset by economic crisis and political upheaval. The economic crisis culminated in Sri Lanka defaulting on payment for the first time. This led to the government being completely cut off from most sources of international funding, including from official multilateral and international commercial sources.
The government’s effort to blame its debt default on the lost revenue from tourism due to the COVID-19 pandemic and increased fuel prices resulting from the war in Ukraine did not carry much weight. One analyst stated that ‘this is the most man-made and voluntary economic crisis of which I know’.
Although many Sri Lankans did not understand what default meant, the effects of the crisis were keenly felt. The foreign currency crunch that followed progressively restricted imports of food, fuel, fertiliser, medicine and other essentials. By August 2022, the annual inflation rate had reached nearly 70 per cent and inflation of food prices had reached nearly 85 per cent — the sixth highest food inflation in the world. 750,000 people have already fallen into poverty. One UNICEF report shows that the food crisis has already taken its toll on young mothers and newborn babies.
The economic crisis has also hit the previously well-off middle class, who now struggle to eat their usual three meals a day. In rural areas, heartbreaking stories have emerged of children fainting at schools because they have not had breakfast. The emergency aid, including food and fertiliser, received from the World Bank, UN World Food Program, Australia and India, was not enough to feed everyone. Food shortages were exacerbated by declining local agricultural output.
Urban Sri Lanka became plagued by lengthy queues for fuel and food, with Sri Lankans waiting under the scorching sun and in torrential downpours. The crisis triggered mass protests by thousands of people from all walks of life. The main protest slogan, GotaGoGama (Gota go home), pointed toward former president Gotabaya Rajapaksa’s personal responsibility for governing Sri Lanka directly into a crisis and demanded his resignation.
The mass resignation of cabinet ministers jeopardised the former president’s attempt to cling on to power. As a last resort, he formed an all-party government, but this lacked support from other politicians who were aware of the political costs of taking part. Still, the former president showed no sign of stepping down and instead made his brother, prime minister Mahinda Rajapaksa, resign.
Before resigning in May, former prime minister Rajapaksa wasted no time mobilising his political supporters to attack peaceful protesters outside his home and at the main protest site, Galle Face Green. The anti-government protesters retaliated by targeting the Rajapaksa supporters’ properties and businesses. Some went even further by burning down the Rajapaksa family’s ancestral home and a museum honouring their parents. In response the state rolled out a variety of repressive measures, including Sunday curfews, social media blackouts, tear gas and water cannons. Presidential orders prohibited any public gathering and protest leaders were arrested.
The peak period of protests from March to July was followed by a massive anti-government march held at Galle Face Green in Colombo on 9 July. Gotabaya Rajapaksa finally fled the country and sent his resignation from Singapore via email on 14 July. As the former president fled his residence, people flocked to occupy it. Some even had a dip in the presidential swimming pool and took selfies while relaxing in the president’s bed.
In the absence of the president, the perpetually unpopular Ranil Wickremesinghe was appointed acting president, under Article 37 (1) of the Constitution. This was announced via an extraordinary gazette notification. Sometimes nicknamed ‘the Eel’ (Aanda) for his ability to glide through any political trap, Wickremesinghe’s dream of becoming president finally came true amid Sri Lanka’s worst nightmare.
The public legitimacy of Wickremesinghe’s rule was immediately clouded. While Wickremesinghe was appointed via a parliamentary process according to Articles 40(1) (a) and 40(1) (c) of the Constitution, there have been allegations that the exiting president paid bribes to lawmakers to secure parliamentary approval for Wickremesinghe’s appointment.
Wickremesinghe has managed to bring slight relief to the people as fuel, electricity, medicine and food items have slowly begun to be replenished. Wickremesinghe’s poor reputation among conservative voters, who widely considered him to be an elitist, Western-style cosmopolitan, was dropped — at least for now — when he secured a bailout package from the IMF by flaunting his liberal sensibilities. Wickremesinghe secured a commitment from Japan to lead the debt restructuring talks with Sri Lanka’s creditors, which are essential to secure a US$2.9 billion bailout package from the IMF. Even a subtle attempt to push Wickremesinghe under the bus any time soon will likely provoke a relapse toward another crisis.
2023 comes with some concerns over the conditions on government spending that an IMF bailout will entail, as well as hope for the opportunities it will provide to promote financial stability. One can expect fewer angry protests in 2023, as the cross-class spirit of Aragalaya (Revolution) has already begun to wane since Wickremesinghe started laying the ground work for rescuing the economy and disciplining society.
As global calls for ‘debt justice’ continue to gather momentum, there is an opportunity for Sri Lankans to take the lead in this emerging movement by rekindling their past ‘Aragalaya’ spirit and channelling it towards the global political arena.
This blog was first published in East Asia Forum.
Opinions expressed in Bliss posts reflect solely the views of the author of the post in question.
About the author:
Shyamika Jayasundara-Smits is an Assistant Professor in conflict and peace studies at the International Institute of Social Studies (ISS), Erasmus University Rotterdam.
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By Juliana Poveda
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By Ana Isabel Alduenda and Camila Ramos
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COVID-19 broke out in Chile last year in the midst of an intensive social conflict rooted in the deep-seated inequalities caused by the free-market reforms in the country. The case of Chile shows how pre-existing conflict dynamics can be strongly intertwined with pandemic responses as earlier protests for greater equality paved the way for a climate facilitating ‘hunger protests’ during the pandemic. In response to growing mistrust in the state, citizens had a strong social mobilization base that drove collective action.
For many decades, Chile’s development trajectory was considered an inspiration due to its positive macroeconomic results achieved following the implementation of neoliberal policies by the dictatorship in the 1980s and supported by democratic governments to present. However, these policies produced deep inequalities among the population (Flores et al. 2019)[1]. With the eruption of protests in 2019 and the COVID-19 outbreak last year, the idea of a ‘Chilean miracle’ started to fade.
The COVID-19 pandemic reached Chile in the middle of the largest social conflict since the end of its dictatorship in 1990. Starting in October 2019, more than a million of people protested each Friday for five months in the center of Santiago, the capital city, to show their discontent and demand improved livelihood conditions. The response of the government to this movement was brutal, leading to high levels of repression, partial curfews, and large, violent clashes that ended in more than 34 casualties and 445 people with eye injuries (from riot guns wielded by the riot police) between October 2019 and February 2020.
As the mass protests proved, the government ignored the socio-economic problems faced by many sectors of the population. A clear expression of the lack of awareness from the government of the conditions experienced in many low-income neighbourhoods was shown in a public statement made by the former health minister of the country, when he stated in an interview that “[t]here is a level of poverty and overcrowding [in Chile] of which I was not aware”[2].
The measures implemented to address the challenges imposed by the COVID-19 were also an expression of this level of ignorance. One of the first measures to address the COVID-19 outbreak was to implement dynamic quarantines[3], which failed to prevent the virus from spreading from less vulnerable to the most vulnerable populations, instead increasing infection levels and mortality rates[4] (Galarce 2020). The failure of this measure is associated with overcrowding in households, the precarity of wages, and the impossibility for people who survive off a daily income to comply with quarantine measures.
In addition to the complete lockdown that followed the dynamic quarantines, another of the early measures was to implement nighttime curfews. This measure was not well received by citizens, nor by the scientific community, which indicated that the quarantine did not have experts’ approval since there was no proof that it reduced the infection rate. They argued that it was intended to reduce civil liberties[5], and, generally, this measure was seen as an expression of the authoritarian nature of the government.
The inability of the measures to counter the effects of COVID-19 led to multiple demonstrations that were known as ‘hunger protests’. This time, people demanded access to food, water, and shelter as many lost their daily incomes due to the lockdown measures. The hunger protests followed the government’s announcement about the distribution of food baskets. People felt that, again, the government did not understand people’s needs—families could not wait to receive food supplies, but urgently required money to obtain (other) basic goods. The government’s response to the protests was highly repressive once more, mirroring its response to the previous protests back in October 2019.
The countrywide social movement leading protests in 2019 and 2020 articulated different demands and had no centralized leadership. It encouraged self-organized local assemblies (asambleas territoriales) composed of young and elderly people and was founded due to mistrust in the existing institutions. These local assemblies embodied collective organization to resist and shape new relationships and solve immediate problems in the neighbourhoods. The movement that led protests months before COVID-19 emerged therefore played an important role during the pandemic, enabling Chileans to solve difficulties the pandemic and the government’s response to it by themselves through collective action.
One of these initiatives is the so-called ‘ollas comunes’ (‘common pots’)[6] through which people helped stave off hunger by cooking for each other. This measure to respond to the COVID-19 disaster is related to previous responses to social conflicts in Chile. As stated by Clarisa Hardy (1986), the ollas comunes initiative is associated with workers’ layoffs and repression suffered after the 1973 coup d’état that brought Augusto Pinochet to power. Therefore it has a strong component of collective memory. This initiative also proved that the self-organization that arose during the protests could solve immediate problems in a context characterized by high levels of mistrust towards the government in a crucial moment for state intervention like a pandemic. It also opened the possibility to act collectively outside of the common frameworks provided by the state and the market.
References
Hardy, C. 1986. ‘Hambre + Dignidad = Ollas Comunes.’ Accessed August 11, 2020 http://www.memoriachilena.gob.cl/archivos2/pdfs/MC0033331.pdf
Flores, I.; Sanhueza, C.; Atria, J. 2019. ‘Top incomes in Chile: a historical perspective on income inequality, 1964-2017’, Review of Income and Wealth, pp. 1-25.
Tinsman, H. 2006. ‘Reviving Feminist Materialism: Gender and Neoliberalism in Pinochet’s Chile,’ The University of Chicago Press 26(1): 145-188.
Foot Notes
[1] Many estimations had been made using different methodologies. All of them are relatively consistent in suggesting that the richest 1% hold between 25%-33% of the national income. For an in-depth discussion, see the following analysis (in Spanish): https://www.ciperchile.cl/2019/12/10/parte-ii-la-desigualdad-es-una-decision-politica/
[2] For the complete declarations, see the following interview (in Spanish): https://www.latercera.com/politica/noticia/manalich-reconoce-que-en-un-sector-de-santiago-hay-un-nivel-de-pobreza-y-hacinamiento-del-cual-yo-no-tenia-conciencia-de-la-magnitud-que-tenia/5BQZLGLOPVDDPKQ2SNSSSWRGYU/
[3] Dynamic quarantines are those applied to a specific place in a territory (a municipality, for example), and that can be lifted or imposed based on the regular analysis of certain patterns, particularly the number of COVID-19 cases in each place under quarantine.
[4] Galarce, A. (2020, May 19). Experto en salud pública USACH: “Las cuarentenas dinámicas hicieron que el virus migrara hacia una población más vulnerable”. Radiousach.cl. Accessed August 10, 2020 https://www.radiousach.cl/experto-en-salud-publica-usach-las-cuarentenas-dinamicas-hicieron-que
[5] At the time of publication, the curfews were still imposed, even though the partial lockdowns were lifted and the COVID-19 infection rate diminishing.
[6] “Common pots involve women pooling the food rations of individual families to collectively provide more substantial meals to entire groups of families, workers and neighborhoods” (Tinsman 2006).
.
This research was part of the “When Disaster Meets Conflict” project. It was undertaken between July and September 2020 and comprised the analysis of secondary sources (news and articles related to the Chilean protests of 2019-2020 and the government’s responses to the COVID-19 crisis). Additionally, five semi-structured interviews were carried out. The interviews included key actors from the Chilean private sector, government, and civil society. The purpose of these interviews was to know these actors’ points of view on the impact and the government’s response to the sanitary crisis
About the authors:
Ana Isabel Alduenda studied International Relations at the National Autonomous University of Mexico and is a current student of the MA in Development Studies at ISS, major Governance and Development Policy. She has worked in the public sector and as a consultant in topics related to government accountability and human rights. Her research interests focus on anti-corruption policies, open data, and gender violence. In addition, she has developed a genuine interest in the social phenomena surrounding pandemics.
Camila Ramos Vilches studied Social Work at Pontifical Catholic University of Chile and is a current student of the MA in Development Studies at ISS, major Human Rights, Gender and Conflict Studies: Social Justice Perspectives. She has worked in local NGOs related to grassroots development, and international NGOs related to sustainable development in the private sector. Her research interests focus on gendered analysis within organizations, diversity and inclusion management and sustainable development.
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By Rogelio Madrueño Aguilar, José María Larrú and David Castells-Quintana
Inequality is above all a multidimensional problem. Yet, the key question is whether it is possible to reduce inequality and to what extent. Recent evidence suggests that the growing divide between rich and poor threatens to destabilize democracies, undermines states’ economies and fuels a variety of injustices, either economically, socially, politically or ecologically. Despite certain variations, this holds true not only for rich economies, but also for low and middle income countries.
Inequality is above all a multidimensional problem. It is by all means a complex issue that requires global solutions in accordance with the challenges imposed by the 2030 Agenda for Sustainable Development. As stated in this agenda “the achievement of inclusive and sustainable economic growth […] will only be possible if wealth is shared and income inequality is addressed”.
Yet, the key question is whether it is possible to reduce inequality and to what extent. Recent evidence suggests that the growing divide between rich and poor threatens to destabilize democracies, undermines states’ economies and fuels a variety of injustices, either economically, socially, politically or ecologically. Despite certain variations, this holds true not only for rich economies, but also for low and middle income countries.
When looking a little more closely at the ongoing popular upheavals, protests and street disturbances in different countries, they have something in common: the dissatisfaction of people, mostly youths, with the uneven distribution of opportunities, limited social mobility and issues of environmental sustainability in their societies, to name only a few. After 2008, all these reasons have triggered a wave of global protest in a growing number of countries, such as Chile, Haiti, Ecuador, Spain, etc.
In particular, there seems to be a lack of confidence in the political class and the institutional setting, and their capacity to reverse these negative trends. More importantly, there is a clear awareness that the concentration of market power and wealth in the hands of the rich with linkages to political power is a fundamental problem.
Institutional solutions versus social mobilization
The open question now is whether we should pave the way for reducing inequality through the normal functioning of institutions, or through different types of mobilization and social protest? In fact, we are indeed witnessing many cases which show a preference for the second option.
Again, the aim of fighting inequality faces a daunting challenge: the combination of rising inequalities within countries and an apparent inequality trap seems to be a vicious cycle that is difficult to break; especially in the light of prevalent inconsistencies in policy objectives and institutional implementation at the national and global level: on the one hand there are mechanisms in place that reinforce economic, political or social structures that lead to persisting inequality. On the other hand, efforts are being made to connect the fight against corruption, crime and tax evasion, which may lead to a reduction of social inequalities.
This lack of policy coherence is affecting economic growth and redistribution as two key conditions to reduce the gap between the richest and the poorest. It is not only that several regions experience weak growth in per capita income, but there has also been a strong opposition to the introduction of a capital gains tax for the wealthiest across countries, who have become even richer over the past decades. This, however, translates into an emerging pattern where inequality is strongly linked with less sustained growth. At the same time the goal of economic growth itself is increasingly being questioned. Particularly in countries of the global north there are serious doubts about its compatibility with ecological sustainability.
Persisting inequalities or paradigm shift?
For all of these reasons we find ourselves facing a tough situation in which class struggle settings are becoming more frequent and severe in many areas of the world. It seems that we are either moving towards a problem of persistent inequalities or standing on the threshold of a new paradigm shift.
Therefore, there is an urging need to examine and assess the different impacts that the spiral of inequality is causing around the world. While acknowledging that some inequalities might be socially fair to a certain extent, others claim asymmetric responses in order to favour socially disadvantaged groups such as women and children. Markets alone are unable to reach an economically efficient outcome or to create a level playing field for all members of society. This means moving ahead towards a balanced social agenda that takes into account the multidimensionality of inequalities as well as the historical, legal, social, economic, climatic and intergenerational perspective.
If you are you interested in discussing global inequalities, please, consider submitting to our seed panel “Rethinking inequalities in the era of growth limits and social injustice” at the EADI/ISS General Conference 2020.
Our panel aims to find new understandings to the notion of inequalities in order to enrich the contemporary development discourse and explore global cooperative solutions. This involves new ideas, dimensions and approaches, including critical voices from the global south.
This article is part of a series launched by the EADI (European Association of Development Research and Training Institutes) and the ISS in preparation for the 2020 EADI/ISS General Conference “Solidarity, Peace and Social Justice”. It was also published on the EADI blog.
Image Credit: Alicia Nijdam on Wikicommons
About the authors:
Rogelio Madrueño Aguilar is Research Associate at the Ibero-America Institute for Economic Research, Georg-August-Universität Göttingen, the Complutense Institute of International Studies, and the Spanish Network of Development Studies (REEDES).
José María Larrú is Professor of Economics at the Universidad San Pablo CEU, Madrid.
David Castells-Quintana is visiting professor in the Department of Applied Economics at the Autonomous University of Barcelona.
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