SRI LANKA Delegation to the IMF : « We were received, we are hereby reporting back as per our mandate »
On September 21, 2022, a meeting took place between IMF representatives in Washington and a delegation of unionists and activists from the United States and France.
This meeting followed the response of the IMF office in Paris: « It is Washington that decides ».
The U.S. delegation included Baldemar Velasquez, President, Farm Labor Organizing Committee, Executive Board member, AFL-CIO (for id only); Donna Dewitt, Past President, South Carolina AFL-CIO (for id only); Gene Bruskin, Veteran labor organizer, National Writers Union; Alan Benjamin, OPEIU 29 delegate to San Francisco Labor Council, AFL-CIO (for id only); Editor, The Organizer Newspaper.
The French delegation (which had gone to the IMF office in Paris five days earlier) was composed of André Yon, trade unionist, member of the POID national bureau; Jean-Pierre Barrois, retired teacher; Dominique Maillot, labor controller, trade unionist; Paul Uhalde, FJR student; Phillipe Bottet, postal worker trade unionist; Jean-Claude Guiguet, teacher trade unionist; and four Sri Lankan activists residing in Paris.
The IMF was represented by Mr. Masahiro Nozaki, head of the IMF mission in Sri Lanka.
⦁ In his presentation, Mr. Masahiro Nozaki pointed out that he had visited Sri Lanka on numerous occasions since April 2022.
It was indeed on that date that the government of former President Gotabaya Rajapaska began discussions with the IMF to « restructure » the country’s $51 billion debt.
The IMF’s proposals calling for the privatization of public services, massive layoffs of civil servants, the sale of vast tracts of public land, and a reduction in social spending were the cause of the general strikes of April 28 and May 6. The latter, called by all the trade unions, was the largest since 1953.
Mr. Nozaki confirmed this: « As you know, on September 1 we reached a benchmark agreement for an IMF-supported program. »
⦁ André Yon summarized the reasons that had led to the formation of the delegation: “In July, Sri Lankan activists launched a call for solidarity with the people’s uprising. 512 activists from around the world joined in. In this international appeal, we said: she is right, this woman who, crying over the death of her husband, after having had to wait
more than 24 hours in a queue in front of a petrol station explains: ‘It is not me, nor my husband who contracted this debt, but it is my husband who paid it with his life. It is all the successive regimes that have contracted these debts that are the ones responsible for the death of my husband. Our country was stolen from us! »
At the same time in Colombo, the Trade Union Coordinating Center (TUCC), published in a Manifesto titled « The Proposals of the Working Class for the Victory of the People. » It reads, in part: “In September, a preliminary agreement was signed between the IMF and the Sri Lankan government. … All compromises or contracts signed with foreign powers privatizing or leasing resources must be abolished. All attempts to reduce public spending or to reduce the number of civil servants and lay them off must be stopped. »
⦁ Alan Benjamin then asked a question, « What exactly is the content of this preliminary agreement? To our knowledge, it is not public in its entirety. If our information is not accurate, can you tell us where we can obtain the complete document, which includes, beyond the generalities, the practical and technical measures for implementing the plan? If it turns out that this comprehensive document is not available, can you explain why a document that commits the lives of millions of men and women is kept secret? What are the reasons for this?”
⦁ Mr. Nozaki responded: « I think you want to know why this agreement is not public. This preliminary agreement still needs to be submitted to the IMF board.” He went on to say that « understands the concerns, » but explained that it is the Sri Lankan authorities who have reserved the right to communicate this plan to the people. He confirmed that the overall text is not public and said that the press release issued by the IMF on September 1 can be referred to. He added: « This agreement with the IMF staff includes fiscal consolidation measures, certainly. We are in discussions with the Sri Lankan authorities to see how we can communicate this agreement. »
⦁ According to information available to the delegation, the speaker of the Sri Lankan parliament argued that it is at the request of the IMF that the terms of the agreement must be kept secret.
⦁Alan Benjamin went on to note the concerns raised by Sri Lanka’s labor organizations, in particular the Trade Union Coordination Center, the broad-based labor coalition that unites Sri Lanka’s mass organizations. He continued: « These organizations are deeply concerned about the demand for widespread privatization of public services of stateowned enterprises. Which enterprises is the IMF demanding be privatized? Why are you also calling for labor law “reform” and modifications to the agrarian reform law? What are they? The oil and electricity sectors are also part of the agreement. In what way, what are the terms? Why should the banks be privati
zed? What are your decisions regarding electricity, whose prices have tripled since August 8? Why are you pushing – in the name of debt restructuring – for the State to stop paying its commitment to the funds that provide for workers’ pensions? »
⦁ Mr. Nozaki explained that “there is no privatization: There are economic problems and management problems. Our method is to carry out reforms of public enterprises according to Article 4 of the agreement. The government will adopt diagnoses of corruption and measures to combat corruption.” In this regard, he said that « the measures envisaged will meet the anti-corruption conventions of the United States”. He continued: « We want to contain the budgetary risks. What must remember that it’s the public enterprises which have been a major source of budgetary problems. This ultimately hurts taxpayers, starting with the poorest. » He added, « Our plan is for four years. »
⦁ Gene Bruskin pointed out: « I strongly concur with the comments by Alan Benjamin. The people of Sri Lanka must not bear the burden of repayment of a debt that they did not contract and from which they did not benefit. The people are not the ones responsible for the irresponsible decisions of their leaders. »
⦁ Donna Dewitt acknowledged the stated commitment by the IMF mission chief in Sri Lanka to help the poorest of the poor but questioned whether the austerity measures promoted by the IMF to address the financial crises might, on the contrary, only exacerbate poverty and oppression.
⦁ Regarding, the energy sector, Mr. Nozaki explained: « There is a need for a top-to-bottom reorganization. We have been focusing on electricity pricing. There
are a series of energy subsidies that have increased the debt. This is part of the problems that Sri Lanka is facing today. So, for the pricing of energy products, fuel, electricity, etc., all these should be aligned with the production prices of fuel and electricity. That would result in a reduction in subsidies, and that would have an effect on consumers. »
⦁ The delegation noted that the rhetoric that has been used to dismantle public utilities around the world is being repeated here. Public utilities “pose budgetary problems » for international institutions since they are not intended to make a profit. As for the abolition of State subsidies to the energy sector, it can only result in a steep rise in the price of electricity, gas and oil, which will further burden the population. How can one not understand that the price of energy « aligned with the price of production » means in reality, following the abolition of State subsidies, the alignment with the financial markets and international speculation? In the context of the war that is spreading throughout the world, does this not translate immediately into an energy disaster for the population? Is the non-publication of the preliminary agreement intended to cover up the scope of the programmed destruction? »
⦁Baldemar Velasquez shared his experience: « The shareholders’ quest for profit always takes precedence over the needs of working people and the poor. Workers in Sri Lanka should be able to feed their families, and that’s true all over the world, on the entire planet. »
⦁ Donna Dewitt insisted: « Sri Lankans are a proud people. They spoke out by taking to the streets in huge numbers in April and in July. This is about helping them. »
⦁ The delegation asked another question about the formation of an implementation monitoring committee in Colombo with representatives of the IMF and the Sri Lankan authorities. « From our point of view this is a way to undermine the national sovereignty of the country. Who makes up this committee? What are its prerogatives? »
⦁ There was no response from Mr. Nozaki on this question.
⦁ André Yon reminded us that we are not talking about abstractions. We are talking about the plight of the people who are suffering more and more every day. The country is in a catastrophic situation and cannot wait four years. The international press reported the words of a Tamil worker: « Even if we can control our own hunger, we can’t say to our children: ‘Look child, that’s all there is to eat, now go to bed’, can we?” Already, according to the FAO (United Nations Food and Agriculture Organization) 31 % of Sri Lankan adults, like him, deprive themselves of food in order to feed their children. He asks the question: « Under these conditions, why condition a loan on the restructuring of the debt? Why not simply cancel the debt that is strangling the country? »
⦁ Mr. Nozaki explained that the current negotiations are aimed « at making the debt more sustainable. » He added, « The IMF is at a macro level to address the problems at the source. It cannot intervene on the debt itself. The program includes macroeconomic adjustment measures that are painful, certainly, for the poorest and most fragile. That is why we need to expand the safety nets with the essential objective of cushioning the shock for the most fragile. As far as Sri Lanka’s rising debt is concerned, this is the result of macroeconomic mismanagement. This is also due to external shocks as well: let’s not forget the pandemic, the war in Ukraine. »
⦁ The delegation asked the question: If the IMF can intervene on debt restructuring, it could very well declare that there is zero debt. How is it possible to protect the « most fragile » if tens of billions of dollars are diverted to repay a debt that is not that of the people? It is clear that the IMF itself recognizes that « painful measures will be implemented ». And the IMF cannot disclaim responsibility for the plans implemented — plans which over decades have led to the current disaster.
⦁ Mr. Nozaki concluded, « We have set up bilateral dialogues, multilateral dialogues, with civil society organizations, with the opposition parties. We have sought to have a dialogue with a wide range of partners. Within Sri Lanka and outside the country. »
⦁ André Yon concluded the meeting by emphasizing that it is not the delegation’s place to speak for the people of Sri Lanka and their organizations, « We will report back with your responses. This is so that the trade union organizations in Sri Lanka can make whatever decisions they deem necessary. We will continue to make the voice of international workers’ solidarity heard”.
Paris, Washington, San Francisco September 21, 2022
At the same time that the delegation was meeting with IMF representatives, demonstrations were resuming in Colombo. People of all faiths, along with political parties and trade unions, took to the streets to protest against rising electricity bills. They have increased by 500 %. One of the organizers of the demonstration said: « We can’t pay the bills. We have no money. We are not responsible for the debt incurred by the State, the corruption, the waste. Therefore, we will not pay these unjustified bills”.