Peter Main
One year ago, the victory of Anura Kumar Dissanayake, the candidate of National People’s Power, NPP, in Sri Lanka’s presidential election, appeared to mark a sea change in the island’s politics. The NPP is an electoral bloc whose main component is the Janatha Vimukthi Peramuna, JVP, which led armed insurrections in the 70s and 80s of the last century. Its election campaign had stressed its “outsider” status as against the “insiders”, that is, the parties that had dominated the country since independence from Britain in 1947.
The complete rejection of those parties was made even clearer in parliamentary elections, held last November. The NPP won a landslide victory, 159 seats in the 225 seat parliament, the most ever won by a single party. Such a majority gave Dissanayake power to overrule existing constitutional measures, meaning, at least theoretically, there were no limits to the radical measures that could be enacted.
JVP strategy
It soon became clear that the much more important limit to such measures was the JVP’s own politics. In its campaign it had promised to defend the interests of the mass of the people, who had suffered a catastrophic collapse in living standards in the aftermath of the economic crisis of 2022. At the same time, it rejected the scare stories of economic collapse from the other parties and the media by insisting it would implement the economic policy imposed by the IMF in return for a $3billion bail-out loan when the country defaulted on its debts.
This “strategy”, in which progress on social reform is seen as dependent on first achieving a stable and prosperous capitalist economy, is essentially derived from the Stalinist programme of “revolution by stages”. It inevitably means that priority is given to restoring profits, which is only possible by increasing the rate of exploitation of the workers and farmers of the country.
As in all other cases, the IMF required policies to ensure this; removal of social welfare and health subsidies, privatisation of state owned industry and services, removal of restrictive labour laws and increased prices for consumer goods. “AKD”, as the president likes to be known, has been true to his word, at least as far as the IMF and Sri Lanka’s employers are concerned.
The most recent forecast from the Central Bank includes a current account surplus, a 5% growth in GDP for last year and a predicted 3.5% this year while reserves have actually gone above IMF targets to reach $4.7 billion. A former director of the Central Bank, Indrajit Coomaraswamy, told Nikkei Asia, „The alarmists were proved wrong, because the new government kept the IMF program on track at the policy level, and it believes that it is good for us since the country is still not out of the woods“. He went on to confirm that the new government had, “…assured continuity by retaining key officials who had worked with two previous presidents since the (2022) crisis, rather than changing them.”
What about the promises to the workers and farmers? In August, a U.N. agency reported that Sri Lanka’s poverty rate had soared to 24.5%, double the 2019 figure. In practice, this meant that half of Sri Lankan families were either missing meals or at least limiting the amount of food they could provide. Typically, the report observed that this was, “despite the macro-economic recovery”. In reality, of course, it was the basis of that recovery.
What this all meant in practical terms is well illustrated by events at NEXT, the fashion company. In May, its CEO, Lord Simon Wolfson, a Tory peer, announced a 13.8% increase in profits over the past year to £515 million and, last week, an expected 1billion for the full year. Meanwhile, in Sri Lanka, where the clothes are made, the firm announced that, because of a recent wage increase of a little under £10 per month, it was closing its factory in the Katunayake free trade zone and sacking the 1,416 workers.
As a result of its pro-business policies, support for the NPP government has certainly declined. In the local elections held in May they won the support of just 42.26% of voters. Nonetheless, the party still won 3927 seats, a huge increase from its previous 434 seats and clear evidence of continued support as well as, no doubt, continued hostility to the traditional ruling parties.
At the same time, inflation, which was 51.7% in January 2023, was already falling before the change of government, reaching just 6.4% by January 2024, but by January this year it was at -4% and prices continued to fall until a slight rise in August. Prices, therefore, while still historically high, have at least stabilised.
In addition, the government has been quite adept at highlighting what reforms it has made. Just last week, for example, it ended the convention whereby past presidents were given a residence in one of Colombo’s plusher districts, plus cars and security staff, for life. This cost the taxpayer some LKR1.1 billion, $3.6 million, in 2024. Few will have any sympathy for the likes of Ranil Wickremasinghe, the outgoing president, or the Rajapakse brothers, Mahinda and Gotabaya, who are widely believed to have fleeced the public purse throughout their years in office.
In terms of workers’ wages, $3.6 million is a lot of money but in relation to government spending it is peanuts and the announcement was timed to distract attention from the government decision to “restructure” the electricity industry, in line with IMF requirements. This will break up the industry into four sectors, generation, network provider, system control and distribution, to attract investment. This is a preparation for privatisation which will inevitably mean international corporations, based in the imperialist nations, will own and control the industry.
Where to go?
The trade union response to this has been very weak. Leaders have refused to attend meetings of the power sector reform steering committees or to respond to proposals from the Reforms Secretariat. The only action taken has been to begin a “sick note campaign” and a “work to rule” to take effect after a strike on September 21. At the same time they have guaranteed to maintain power supply in order to protect public interests. Even so, the government has responded by invoking the Essential Services Act, which outlaws any actions. An effective fightback has been hampered by the presence of 25 different unions. One of them, the Ceylon Electricity Workers’ Union is controlled by the JVP and has actively campaigned in support of the government’s plans!
The fragmentation of the trades unions, and the divided loyalties of many of their leaderships, is a fundamental problem for workers right across the country’s economy. To overcome it, the workers themselves, highly skilled in this particular industry, need to fight for control of their own futures. Socialists should campaign for joint union meetings in the workplaces, the adoption of a strategy against all forms of privatisation and the building of joint union action committees to lead the struggle.
Within the existing unions, members should demand their leaders support joint actions with the goal of building a single union for the whole industry, breaking with those leaders who obstruct actions, let alone support the government’s policy. Such a campaign, in an industry central to the whole economy, could act as catalyst for workers everywhere in the country. Those militants who understand the necessity for a rejuvenation of the whole labour movement, once a powerful force in Sri Lanka, need their own party in which to hammer out a fighting programme not just in defence of existing jobs and rights but for the expropriation of key industries and corporations under workers’ control.