Saroj Pathirana

5 September 2022: While the Government attempts to assuage the fears of the international community, it has been quashing protests at home, reports Saroj Pathirana

The International Monetary Fund (IMF) and Sri Lanka have reached an agreement for a $2.9 billion bailout to resolve the country’s economic crisis, on the condition that a deal is reached with creditors and that a reform process is set in motion. 

The agreement comes as food inflation rises to 94% and amid an alert by UNICEF that staple foods have become unaffordable to many – causing malnutrition in Sri Lanka to be among the highest in the region. 

Food insecurity has compounded social issues in Sri Lanka, with the UN estimating that half of children already require some form of emergency assistance. The World Food Programme recently found that nearly 30% of the population regularly skips meals.

The country’s former President, Gotabaya Rajapaksa, replaced his brother Mahinda as Prime Minister with 73-year-old (former Prime Minister) Ranil Wickremesinghe in May, following weeks of mass protest. Tens of thousands of people took to the streets as they were forced to queue for days for fuel and gas amid skyrocketing prices. 

Despite unprecedented economic woes – exacerbated by a ban on chemical fertiliser in an attempt to become the first 100% organic country – Rajapaksa repeatedly refused to enter into negotiations with the IMF; while Sri Lanka’s major economic patrons, China and Japan, also distanced themselves from the crisis-hit nation.

Declaring bankruptcy, Sri Lanka halted all loan repayments in April due to a lack of foreign reserves.

Rajapaksa hoped that the appointment of veteran politicians would help to stabilise the economy and end mass anti-government sentiment. This hope proved to be forlorn, and he was forced to flee the country on 13 July after massive crowds stormed the presidential secretariat and several other government buildings.

Wickremesinghe, who led the negotiations with the IMF, was appointed President by the Sri Lankan Parliament following the resignation of Rajapaksa.

Delivering an interim budget, the new President recently announced major tax reforms, new pricing mechanisms for fuel and electricity, the implementation of targeted safety nets for the vulnerable, data driven-monetary policy, and a flexible exchange rate. 

In addition to the IMF bailout package, Sri Lanka has also sought the assistance of Japan to organise a donors’ conference. Following the controversial decision by Rajapaksa to hastily pull out from a Japan-funded railway project, the country has withdrawn from at least 12 projects and there have been mixed signals about Wickremesinghe’s latest request.

However, Chandana Wijekoon, a political analyst and the assistant editor of the state-run Dinamina newspaper in Sri Lanka, says that Japan is keen to help Sri Lanka at a time of a crisis – claiming that he was personally told of these intentions by the Japanese Ambassador in Colombo. 

As per the agreement, the IMF has called for the immediate resumption of debt restructuring negotiations with Sri Lanka’s creditors.

Meanwhile, China, Sri Lanka’s biggest lender in recent years – accused of encircling the island nation with a ‘debt trap’ – has refused a request for debt restructuring by Wickremesinghe.

A spokesman for the Chinese Embassy said that China has communicated to Sri Lanka authorities about its readiness to discuss how to address the debt issue three months ago, claiming that there had been no response by the Sri Lanka Government to the proposal. 

Troubled Times Ahead?

Though he wasn’t the choice of the protestors, many political pundits regarded Wickremesinghe as the only person, if any, who could garner international support to steer Sri Lanka away from its present turmoil.

He promised to form an all-party government, alongside implementing economic reforms, though opposition parties refuse to form a government with the Rajapaksa-led ruling Sri Lanka Podujana Party.

While offering an olive branch to opposition parties and promising reforms, Wickremesinghe also unleashed a brutal crackdown on unarmed protestors, the majority of whom are university students.

Early on 22 July, less than 24 hours after he took the oath as the new head of state, Wickremesinghe ordered the military to attack unarmed protestors in ‘GotaGoGama’, the park in Colombo renamed by protestors as “the village to send Gota (the former President) home”, while retaking the government buildings captured by the protestors.

Since then, more than 3,000 protestors have either been arrested or questioned by police amid strong criticism from the international community, human rights watchdogs and activists.

“The Prevention of Terrorism Act (PTA) is a very serious law meant to be used in very limited circumstances,” says human rights lawyer Ramani Muttettuwegama, a former commissioner of the Human Rights Commission of Sri Lanka (HRCSL). “It is not meant to be used in the ordinary law enforcement process. And to use the Prevention of Terrorism Act to arrest people who are protestors sounds totally ludicrous actually.” 

Three protest leaders have been detained under the notorious anti-terror laws for 90 days without facing a judge, and protestors receive summons to police almost daily. A member of Sri Lanka’s indigenous Vedda community, Wasantha Mudalige, is among those three leaders detained.

Their detention order was signed by Wickremesinghe the day after a UN special envoy urged him not to sign it. Mary Lawlor, the UN Special Rapporteur on Human Rights Defenders, said if that Wickremesinghe signed the order, it would be a dark day in Sri Lanka’s history. 

“When you use such a serious law to arrest and detain a person who is accused of conducting a protest, it is very sad,” says Muttettuwegama. 

Muttettuwegama also expressed serious concern over the hate speech directed at the Vedda community following the detention of Mudalige, and says if such a trend continues, there will be serious consequences. 

As Wickremesinghe doesn’t seem to be in a mood to listen to these concerns, the international community is reported to be preparing a fresh resolution on Sri Lanka to be submitted to the upcoming United Nations Human Rights Council (UNHRC) session in Geneva. 

While the IMF and Japan may yet ease Sri Lanka’s pain, Wickremesinghe is struggling on many fronts to grip this crisis. This is exactly why, it seems, he is determined not to let the protestors have their say, even if they are peaceful. 

Having failed to form a much hyped all-party-government, and amid some criticism from his supporters, the political situation is expected to get more complicated with the expected return of Gotabaya Rajapaksa from exile. 

Though Rajapaksa was accused of extreme militarisation, Wickremesinghe has relied on Rajapaksa’s structures, and in fact seems to be relying even more heavily on the security forces. 

Sri Lanka’s military has so far been loyal to civilian authorities since independence and there is no immediate threat of a military take over. 

Wickremesinghe said the agreement with the IMF was an important step in the history of Sri Lanka. “Not only rising from the bankruptcy crisis and the debt moratorium, it is also key to ensure that our social sectors are protected and both our economic and social aspect of our lifestyle will certainly not have any further setbacks,” he claimed.

But analysts have pointed out that the Government would not be able to use IMF funds to address skyrocketing food and fuel prices – while the IMF agreement, which needs to be approved by the executive board, will only come into effect if and when Sri Lanka implements fiscal reforms.  

Therefore, if Wickremesinghe fails to address the immediate grievances of Sri Lankans – including poverty, health, food security and corruption – there will still be troubled times ahead. 

Byline Times

• Indian boats have been illegally poaching in Sri Lanka’s waters, taking advantage of the country’s economic crisis and struggling fishermen
• Now a Beijing-owned venture has been helping them to cultivate sea cucumbers instead, to be exported to mainland China, Hong Kong and Taiwan

Sonia Sarkar

At 7am, Velupillai Rasaratnam, pushes his 15-feet long wooden boat closer to the Karainagar shore with the help of a younger fisherman in Sri Lanka’s war-torn Northern Province.

Wearing a black T-shirt and red shorts, the 70-year-old rows for around an hour, catching a few grey mullets that he plans to sell for 700 Sri Lankan rupees (US$2) at a local fish auction.

An hour is as far as his tired arms can take him. And as Sri Lanka reels from an acute economic crisis, it is increasingly clear that fishermen like Rasaratnam have borne the brunt of major fuel shortages.

With the price of kerosene quadrupling to 340 rupees (US$0.93) per litre, “I could not take my motorised boat to sea. Therefore, going too far wasn’t possible”, Rasaratnam said, adding that he goes fishing just twice a week these days.

Before the country went bankrupt, he used to go out every day to catch about 5kg of fish that earned his family of five around 5,000 rupees (US$13.89).

But kerosene was a scarce commodity even before the price hike in August, forcing many fishermen to buy it at 1,500 rupees (US$4.17) on the black market.

The availability and cost of fuel are not the only worrying issues fishermen are facing. In the last two decades more Indian boats have been making their way to Sri Lanka’s territorial waters to fish there, illegally.

“While we are confined to our homes due to a lack of kerosene, Indian fishermen are taking away all our resources,” said Rasaratnam.

Illegal fishing

Fishermen from India’s southern Tamil Nadu and Sri Lanka’s Northern Province are legally allowed to fish in the Palk Strait, a narrow strip of water between the two countries.

Three months ago, a representative of fishermen in Northern Province’s Mannar district appealed to Tamil Nadu’s chief minister to stop Indian fishermen from poaching in its smaller neighbour’s waters, especially at a time Sri Lanka is experiencing an economic crisis.

But that call went ignored. Last month, the Sri Lankan navy arrested at least 16 Indians for illegal fishing after they intruded into the island nation’s waters.

Kandasami Rajachandran, president of the Ambal Fishermen’s Cooperative in Karainagar, said that since the arrival of Indian trawlers, Sri Lankan fishers have for the past decade been bringing back just one basket of fish – weighing barely a kilo or two – whereas they used to return with six to eight earlier.

The foreign trawlers usually take away many kinds of marine life, including needlefish, emperor fish and prawns.

Rajachandran said the biggest catch that day was three stingrays weighing about 26kg each. “But we used to get much bigger stingrays earlier, now they are taken away by the Indian trawlers.”

The trawlers began intruding into Sri Lankan waters in 2002, he said, when fishermen in the north were banned from fishing as civil war raged between armed Tamil separatists and the Sri Lankan army.

Their livelihoods were further affected by the devastating tsunami that hit the Indian Ocean in 2004, he added.

Thankarasa Prakash, 40, another fisherman, who has often seen Indian trawlers near Karainagar, thinks his government has not addressed the problems caused by them because the Sri Lankans whose livelihoods are affected are mostly Tamils, an ethnic minority in the Sinhalese-majority country.

However, Sri Lanka’s fisheries minister Douglas Devananda, a Tamil politician, said the government had made several attempts to curb Indian fishing, but efforts had failed.

A new lifeline?

With the backdrop thus set, a Chinese company has stepped into the breach.

More than 1,000 fishermen in three northern districts – Mannar, Kilinochchi and Jaffna – are now cultivating sea cucumbers, a marine creature often seen as a delicacy in Chinese cuisine, as part of a venture between Gui Lan Hatchery and Sri Lanka’s national aquatic development authority.

The company, started in 2015, is run by four directors from mainland China and Taiwan.

Devananda said he was also encouraging fishermen to explore other “alternative sources of livelihood” like cultivation of seaweed and sea bass too.

Steven Gong, Gui Lan’s Taiwanese co-owner and administrative executive who has lived in Sri Lanka for more than 30 years and has three children with his Tamil wife, noted that the start-up costs for such operations were low, with an initial investment of 500,000 rupees (US$1,369) per acre for setting up infrastructure lasting five years.

Fishermen also get financial help from the International Labour Organization to buy juveniles from the hatchery.

Gong said his firm provided cultivators 60-day-old sea cucumbers weighing 1 gram for 60 rupees each (US$0.16).

“The farmers, including some fishermen, nurse the juveniles for 10 months until each weighs about 250 grams, then they are sold for 1500 rupees (US$4) to exporters,” Gong said. “But [those] cultivators who nurse the sea cucumbers for a few more months till they weigh 500g each, sell them for about 3,000 rupees (US$8).”

In 2021, Sri Lanka exported about 336 tonnes of sea cucumbers – prized for their soft interiors and chewy skin – to Singapore, mainland China, Hong Kong and Taiwan.

The government this year approved a large-scale commercial sea cucumber project of over 5,000 acres in the country’s northern and eastern districts.

M Thivagaran, president of the Jaffna Sea Cucumber Cultivators’ Association, said sea cucumber cultivation had given a ray of hope to fishermen suffering severe losses.

“Annually, a sea cucumber cultivator can earn a guaranteed sum of 1 million rupees (US$2,830), but a fisherman earns barely 480,000 (US$1,333), which is not guaranteed in the current economic scenario and at a time when Indian trawlers look unstoppable,” said Thivagaran. He said 300 fishermen in Jaffna, the capital of the Northern Province, had switched to sea cucumber cultivation since last year.

India-China rivalry

Critics have also raised concerns about the sea cucumber initiative as it comes at a time when China – one of Sri Lanka’s largest creditors with at least US$3.5 billion of outstanding loans – is being partly blamed for pushing the nation into a debt crisis.

Traditionally, India is seen to be closer to Sri Lanka’s north, largely because of the shared Tamil ethnicity, but China has also been making inroads in the region as both superpowers compete to gain a strategic edge over the island nation.

Last year, China’s ambassador in Sri Lanka, Qi Zhenhong, distributed rations to fishermen affected by Indian trawlers. In May this year, at the peak of the economic crisis, India sent 15,000 litres of kerosene to northern Sri Lanka’s fishermen.

Jaffna-based economist Vivekanandan Niranjan said Sri Lanka was allowing the India-China “geopolitical game” to play out in its territory because of the lack of political and economic stability.

Niranjan added that New Delhi and Beijing will use the island nation to settle scores with each other till it returns to normalcy.

“But both countries must understand that Sri Lankans are worried if the two are capitalising on the island’s current instability and using its territory as the playground,” he said.

South China Morning Post