03/18/2009, 00.00
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Sri Lanka suffering from the global crisis, government in denial

by Melani Manel Perera
Women and children are the hardest hit. The endless war between the army and Tamil rebels is making matters worse; so are decades of waste and corruption which have crippled the country. Here is an interview with sociologist Sunil Ranasinghe.

Colombo (AsiaNews) Sri Lanka is not being spared by the worldwide economic crisis. In an interview with AsiaNews Sri Lankan sociologist Sunil Ranasinghe confirms that the global recession is having a major impact on the country. In order to continue its war against Tamil Tiger rebels the government is downplaying the problem, accusing those who talk about crisis of deceiving the population. In fact “we are in the midst of a social, economic and political crisis.”

What are the reality and myths of the economic crisis in Sri Lanka?

We are trying to understand the extent, roots and nature of the crisis at the global and local levels. Academics and activists are trying to interpret a crisis that is spreading like wildfire, affecting the rich and poor alike. But the Sri Lankan government and the head of the treasury are saying that there is no economic collapse in the country related to the global crisis, and are criticising economists and the opposition for deceiving the nation on this issue.

If that were true why is it that they got the International Monetary Fund (IMF) to give them a loan? Even children know that we live in one world, affected by the same global meltdown that is affecting everybody else, with rapidly rising unemployment and poverty.

How did Sri Lanka avoid this situation? What kind of dispensation do we have that we are not affected? The fact of the matter is that when the financial bubble burst the government asked for a US$ 1.9 billion loan to get out of the current economic quandary.

The IMF closed its bureau in Colombo in 2007, saying that no project was planned in Sri Lanka for the foreseeable future. In fact we are in the midst of a social, economic and political crisis. No one can get away with inventing political myths in order to carry out a brutal war against the nation.

Can you explain the present economic situation in Sri Lanka?

In December 2007 foreign currency reserves stood at US$ 3.4 billion dollars. Today they are down to US$ 1.7 billion, which correspond to three months of imports of food and basic necessities. In the last few years the government wiped out 45 per cent of the country’s reserves in war expenditures.

In its latest financial statement the government said it was going to raise 760 million rupees (US$ 7 million) in taxes, on the back of the population. The government is also expecting some US$ 600 million from the Japan international Bank Corporation to privatise the energy sector. Yet its overdraft on banks and the Bank of Ceylon is for more than 1.6 billion rupees (or about US$ 200 million).

The fact that the president had to call on Sri Lankan expatriates to help out is a sign of the crisis; it is the government and its backers who are deceiving the population.

How much does the past affect the current crisis?

Since 1980 many state-owned companies have been sold as part of the Structural Adjustment Program of the World Bank and the International Monetary Fund. This was meant to reduce the foreign debts of developing countries accumulated during the Seventies.

Sri Lanka was among the first in Asia to espouse free market economics. Since 1990 the government in Colombo has sold about 100 state corporations to private interests.

Corruption has increased as the nation’s wealth and public resources became tools in the hands of politicians and bureaucrats with total disregard for the interests of the population.

More than a thousand billion rupees have been wasted this way and people have become poorer.

The United States chose to decide their fate in the pursuit of the War on Terror, wasting US$ 35 billion since 9/11. Sri Lanka has increased military spending by billions of rupees, forgetting that half of the population lives below the poverty line.

Women and children are the hardest hit by the crisis. What can be done to avoid it?

With the war still on we cannot deal with the situation faced by many women. Women are half of a population of 20 million. One woman in two lives on 200 rupees a day (US$ 1.80) and many are poor without access to basic social services, treated like human garbage, suffering from hunger and malnutrition. About 45 per cent of pregnant women suffer from anaemia.

Children are not much better off. About 32 per cent are malnourished, and one in three is under weight.

Women are victims of the political system and male chauvinism which violate their basic rights. They are marginalised by the war and the country’s economic and cultural inequalities.

Yet they are the heart of the country’s economy. Out of 600,000 people employed in plantations, half are women who earn about a billion dollars. Out of 280,000 people working in free trade zones, about 75 per cent are young women, generating about US$ 2 billion.

All this money has not however freed women from enslavement and social segregation.

In the past 30 years more than 120,000 Sri Lankans have sent home earnings they made overseas, working as slaves; 65 per cent of them are women, who altogether earn about US$ 2 billion.

Until a few months ago foreign remittances by emigrants were worth more than US$ 3 billion; now they are down to US$ 1.2 billion.

Who destroyed such a women-based economy, the result of women’s toiling, tears and blood?

Women working in plantation are now sitting in front of their homes watching their children go hungry, asking themselves who stole the future. More than 16,000 young female workers have been laid off. What future do they have? More than 10,000 women, who lost their husbands fighting for the army in the last three years, have given up on their land because they cannot farm it because of the war. . . .

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