• ‘Yukthi’ to promote understanding of working people’s experiences amid ongoing economic crisis

A collective of researchers, activists, civil society organisations, and community leaders came together on 18 May to launch ‘Yukthi,’ a platform dedicated to pursuing debt justice for working people in the wake of the economic crisis. ‘Yukthi’ aims to promote a better understanding of working people’s experiences, critical analysis, and alternatives to neoliberalism. 

At the launch event of the platform, speakers highlighted the ongoing economic crisis in Sri Lanka, its impact on working people despite messaging from the State that the brunt of the crisis had passed, and the need for systemic change. The event featured prominent activists and researchers, including Feminist Collective for Economic Justice (FCEJ) Representative Madhulika Gunawardena and University of Jaffna Department of Sociology Senior Lecturer Dr. Ahilan Kadirgamar, who provided critical insights into the nation’s financial predicament and proposed pathways for a more equitable future.

Importantly, ‘Yukthi’ highlighted that the current International Monetary Fund (IMF) agreement Sri Lanka had entered into effectively only postponed the unbearable repayment of private and bilateral debt (with interest) to 2027 – at which time Sri Lanka would likely default on this debt and need to seek IMF support once again, leading to further austerity programmes. 

‘Yukthi’ seeks to build a movement for debt justice and recognition of the working people’s struggles within Sri Lanka, and educate the public on the impacts of the IMF programme, whose austerity measures serve to stress an already impoverished working people while redistributing the State’s few remaining assets and resources to the ruling elite. 

An alternative to the IMF approach

Speaking at a panel discussion held to launch the web platform, Committee for the Abolition of Illegitimate Debt (CADTM) Member Dr. Amali Wedagedera, Dr. Kadirgamar, and Gunawardena highlighted that the ongoing IMF programme was the 17th time Sri Lanka had reached out to the IMF for aid, which made it clear that IMF intervention was not the long-term solution Sri Lanka needed. 

The panel explained that the IMF agreement saw Sri Lanka receive loans of $ 660 million annually for four years. However, from 2024 to 2033, Sri Lanka will need to pay out over $ 2  billion in surcharges on these IMF loans. 

While ostensibly the economic crisis is evening out – surpluses in primary balance and more controlled inflation are positive moves – in order to meet macroeconomic targets, the burden on the working people has grown exponentially, with little hope of relief in the coming years. Electricity tariffs have increased over 400% since 2022, dispossessing over one million people of electricity while the Ceylon Electricity Board (CEB) has recorded substantial profits in 2023; taxes were heightened at a time of an unprecedented increase in the cost of living. 

Gunawardena highlighted the regressive nature of current taxation policies. “The whole tax system, including Value-Added Tax (VAT), burdens the working people disproportionately,” she explained. High taxes, combined with a high cost of living, have exacerbated the plight of the poor, leading to increased unemployment, school dropouts, and a general decline in living standards. She stressed that taxation should be based on the principle of redistribution, yet current policies failed to address this fundamental issue. 

Moreover, austerity measures have led to drastic cuts in social protection, which was already minimal during the Covid-19 pandemic. “The IMF has capped spending further to 0.6% of our Gross Domestic Product (GDP),” Gunawardena pointed out, highlighting the dire consequences for social welfare programmes and the long-term economic stability of working people.

Dr. Wedagedara provided a broader perspective on the global debt crisis, emphasising the structural inequities faced by countries in the Global South, and criticising the IMF’s dual role as both lender and arbiter which created a conflict of interest detrimental to debtor nations. She also advocated for an alternative approach to debt restructuring, noting: “The IMF’s programme and its solutions are making the crisis worse.” 

As an alternative, she argued for independent arbitration outside the IMF framework. “What we need is a different arbitration, possibly under a different member of the United Nations (UN), to ensure fair and just debt restructuring,” she said, calling for greater solidarity among Global South countries to collectively challenge the exploitative global financial architecture.

The panel also underscored the importance of broadening the understanding of democracy beyond periodic elections, urging the public to remember that democracy was not just something that happened on election day but every day, and that the public needed to make their voices heard and vote at all levels of Government to build a robust Government that could be held accountable to advocate for the defence of people’s rights against unjust economic policies even when it went against the global status quo. “This is not just about debt restructuring; it’s about debt justice,” Gunawardena said. 

Perspectives of the working people

A second panel to commemorate the launch of ‘Yukthi’ focused on the struggles of the people caused by the debt crisis. This panel was moderated by Climate Action Now Sri Lanka Founding Partner Melani Gunathilaka and Young Researchers’ Network Member Yathursha Ulakentheran. 

It also featured a diverse collective of community activists including fisher leader from the Kayts island off Jaffna Annalingam Annarasa; researcher, activist, and Colombo Urban Lab Founder Iromi Perera; Young Researchers Network Member R. Babyshalini; Law and Society Trust Senior Researcher Vidura Prabath Munasinghe; University of Peradeniya Faculty of Agriculture Department of Agricultural Economics and Business Management Head and Kuppi Collective Member Shamala Kumar; and Attorney-at-Law Ermiza Tegal. 

Annarasa, who serves as an adviser for his fishing community based on Kayts island off Jaffna’s coast, emphasised on the lack of support received by small-scale fishermen from the State and the adverse impacts of legal reforms favouring capitalist and export businesses. 

“For over three years, families have been struggling. We have tons of debt from banks and others, and we are harassed in our homes. ‘Yukthi’ gives us a chance to explain our problems as well as find common ground with others like us who are struggling. Our lives are in danger and our voices aren’t heard by the Government,” he said.

Perera, whose research focuses on urban poor communities, discussed the severe impacts of the economic crisis and pandemic on these communities, particularly in Colombo. “Electricity tariff hikes have had a profound impact on nutrition and education. In urban poor communities, even small housing units have bills comparable to middle-class homes. A 400% hike in one year means that essentials like food and electricity have become unaffordable, leading to long-term impacts on health and education,” she shared. 

Meanwhile, Munasinghe addressed rural poverty and food security issues exacerbated by the economic crisis and austerity measures, noting: “According to the World Bank, 68% of the population is facing food insecurity. Small-scale farmers, who produce 80% of our food, are being hindered by policies promoting large-scale, export-oriented agriculture, thus exacerbating the crisis.”

Babyshalini focused on the plight of estate workers, including food insecurity and the impact of rising costs on education in the hill country: “Estate workers are facing severe repression and food insecurity. The increased costs of living, particularly in stationery, have led to a sharp rise in school dropouts, further entrenching poverty in these communities.”

Kumar discussed the brain drain and the future of higher education in Sri Lanka, noting: “The current attempts to dismantle free education are concerning. The education system is being starved of funding, leading to a situation where the quality of education is deteriorating, and students and teachers are being vilified for protesting these changes.”

Meanwhile, Tegal critiqued the rapid legal reforms introduced without public mandate, which she argued were curtailing rights and undermining democratic processes. “We are witnessing a slew of laws that affect the economic and social rights of people, implemented without a legitimate mandate. This rapid reform agenda undermines fundamental rights and uses the economic crisis as a pretext to roll back protections and expand executive power,” she said.

A plural platform for debt justice

The launch of ‘Yukthi’ represents a significant step toward addressing the multifaceted challenges posed by Sri Lanka’s economic crisis.

The platform is a collaboration of expertise of lived realities, practitioners, professionals, researchers, and academics dedicated to supporting working people’s movements and people’s struggles for democracy and justice, and fostering discussion on the systemic flaws facing the country caused by neoliberal policies and IMF-led austerity measures. 

As ‘Yukthi’ continues to grow, it aims to unify diverse communities under a common cause, challenging unjust economic policies and striving for a more equitable future for all Sri Lankans.