A Way Out of Economic Crisis: End the Occupation of Tamil Territory
Question for the month
Question – The Government states that Covid 19, consequent drop in Tourist arrivals and tax cuts were the cause for the economic crisis. Would you accept that to be so? What chances are there to reverse the process?
Response – Certainly not! This crisis started taking effect from around 1983. In the 23 years between 1960 and 1983, Sri Lanka’s military spending remained between .02 to .03 billion US Dollars.
In 1983, the first year of military operations against the Tamil national territory, that figure suddenly increased to .05 billion US Dollars. In 1984, it was $0.19 billion; in 1995, $0.76 billion; and in 2008-2009, the final stages of the war, Sri Lanka’s military budget hovered at $1.5 billion per year.
By 2015 – in “peacetime,” under the Sirisena government – Sri Lanka’s army was consuming a whopping $2.06 billion annually. In 2019, the military budget was still above its wartime peak: $1.67 billion per year.
In 2015, 2016, and 2017, the number of military personnel increased by 18.87%, 15.08%, and 3.87% respectively, above the previous year.
And yet, today, Sri Lanka cannot purchase basic essentials for its people from the world market.
In simple terms the pattern of spending on Military matters increased as follows –
From 1995 to 2002 – 1346 Million US Dollars
During Peace Time From 2002 to 2005 – 1056 Million US Dollars
During final stages of the war, from 2006 to 2009 – 1499 Million US Dollars
No one Government is responsible for this stupidity. Every Government has to take the blame. All purchases of heavy Military armaments carry with them quite handsome Commissions in Dollars. Check the worth of our Politicians prior to 1983 and compare them with what they are now. Details of Houses owned by our VVIPs in the US have now been publicized. All their “nationalism” and sabre rattling cries against the “Terrorist” Tamils and “Extremist” Muslims were a cover up for the marked steady increase in their foreign assets!
Thus Sri Lanka’s financial woes today are the legacy of its war: a needless conflict to deny Tamils their right of self-determination. Its economic crisis is also the cost of the ongoing military occupation over Tamil national territory – the North and East of Sri Lanka.
An interesting facet of our spending has been the bailout given by IMF. Here are some details-
IMF Bailout: September 14, 1983—100 million SDR
Sri Lankan government activity at this time: Providing support to mob attacks against Tamils (“Black July” 1983, leaving 3,000 Tamils dead, and thousands displaced internally or forced into deportation).
(Figures in SDR are “Special Drawing Rights,” the IMF’s non-currency asset. One SDR is worth about $0.726 USD [216 LKR] at current rates.)
IMF Bailout: March 9, 1988—156.17 million SDR
Sri Lankan government activity at this time: Prawn farm massacre (27 January 1987), 87 Tamil civilians killed; Alvai temple shelling (29 May 1987), several thousand Tamil civilians attacked and 63 killed. Crushing the JVP insurrection (1987-89), with 30,000–60,000 Sinhalese people killed or forcibly disappeared.
IMF Bailout: September 13, 1991—336 million SDR
Sri Lankan government activity at this time: Kokkadichcholai massacre (12 June 1991), at least 67 Tamil civilians killed. One officer found guilty of lack of control over his troops and of illegally disposing the bodies of the victims; 19 soldiers acquitted.
IMF Bailout: April 20, 2001—200 million SDR
Sri Lankan government activity at this time: According to the US State department: “Between April 1995 and December 2001, several hundred persons were killed or disappeared after being taken into security force custody….At year’s end, the government was investigating 29 cases of rape, 109 cases of torture, and 500 cases of disappearance by security force personnel.”
IMF Bailout: April 18, 2003—269 million SDR and 144.4 million SDR (two bailouts on the same date)
Sri Lankan government activity at this time: Peace talks, over control of Tamil territory, broke down in May 2003: weeks after the bailouts. This led to Mahinda Rajapaksa’s bid for power in 2005.
IMF Bailout: July 24, 2009—1.65 billion SDR
Sri Lankan government activity at this time: The Mullivaikkal massacre in May 2009, and similar military operations in the war’s final phases, left a UN-estimated 70,000 civilians dead, with other reports that the death toll was far higher. These massacres took place while negotiations with the IMF were ongoing. Afterwards, 300,000 Tamils were forcibly interned at Menik Farm camp alone.
IMF Bailout: June 3, 2016—1.07 billion SDR
Sri Lankan government activity at this time: According to Human Rights Watch’s report on military occupation: “the pace [of land release] did not match the six-month deadline set by the President in January 2016, and furthermore it appears to be slowing down, raising concerns about political will. A particularly worrying sign came in September 2017 when government representatives met the UN Secretary-General in New York and provided a document stating that only 47 acres were to be released in 2018 with none proposed for 2019.”
IMF talks in current economic crisis: Began in March, 2022
Sri Lankan government activity at this time: According to a 2021 report by the Oakland Institute: “The military occupation is extreme — with roughly one military member for every six civilians. Meanwhile, thousands of Tamils, including over 23,000 people in Jaffna alone, remain displaced 12 years after the end of the war, awaiting resettlement with no end in sight.”
A Way Out for the Sinhala and Tamil Peoples in Sri Lanka
The IMF reports that much of the debt Sri Lanka incurred during each of these bailouts has been repaid, with the exception of the 2016 arrangement. But, as everyone knows, Sri Lanka’s debts to the IMF have only been shifted to the international sovereign bond markets; international lending institutions, as well as to China, Japan, India—and remarkably, among others, to Bangladesh.
On April 4, 2022, Human Rights Watch sent a letter to the IMF about Sri Lanka, which read:
“Especially in the north and east of the country, where militarization is most intense, the military has been implicated in rights violations against the same communities of which it increasingly maintains control. Furthermore, the military’s intense resistance to accountability for alleged abuses contributes to resistance to holding it accountable and subjecting it to civilian oversight for governance and financial issues.”
This is where the money has gone. While Sri Lankans in the South are paying for the occupation of Tamil territory by their Military, Tamils are making payments for their own genocide.
Please consider the following matters-
There were loans taken on unprofitable ventures by Governments such as for the construction of the Mattala Airport. The colossal money spent has not yielded any appreciable returns. If China were to stick to its repayment by the original date not consenting to a rescheduling what will the Government do?
We have been shunning the IMF so far. Even to reschedule our debts it will take time. Until then what of the Country?
Rescheduling is with regard to Country to Country. But what of the International Sovereign Bonds? Are we going to default and get ourselves into the bad books of the International Community?
How long are we going to put off the appointment of a Finance Minister and Secretary to the Treasury?
The figures show that “regime change” will not solve the problem. Military spending was highest under Sirisena. If the Sri Lankan people want to gain their own freedom from the present administrators, they will have to assist the Tamil people in gaining their freedom as a nation. The Administrators so far have painted a black picture of the Tamils and Muslims for their own financial benefits. The average Sinhalese does not hate the Tamils nor vice versa. All this fear and suspicion and hatred among the people of this Island have been created by selfish politicians for their own benefits. Now the time is ripe for the Sinhalese to take the Tamils into their confidence. For its part, the Tamil diaspora will not invest a single rupee in Sri Lanka until Tamils have political freedom in their own homeland: to exercise their right of self-determination by referendum.
Yet, there is a way out of this economic crisis to be attempted immediately.
First, Sri Lanka must withdraw all troops from Tamil territory and end its military occupation of the Tamil homeland. They are only a nuisance in the North East.
Second, Sri Lanka must develop a political solution to the ongoing conflict, through an internationally supervised referendum among the North Eastern Tamil people.
For both Tamils and Sinhalese, the economic crisis can end when military occupation ends. Call off the Military from the North and East and reduce their numbers. We are the 15th largest Army in the World. Should we continue to be so? If you reduce the size of the Military you save much money.
But existing problems need to be solved by financial wizards among us both local and diaspora. We are glad at last two Tamils and a Christian have been appointed to the Committee of Experts to formulate the rescheduling and all allied matters and advise the President. For too long all positions and offices were given on ethnic and religious lines and the Country has suffered enough. The best in the field need to be appointed from now on even if they are Sinhala Buddhists! Just chasing Gotabaya out is not going to solve our present problems. It would increase since the Opposition cannot agree on an alternative.
May be Chandrika Madam could do another January 8th 2015 and reverse the process!
Daniel Alphonsus – Sri Lanka’s Post War Defense Budget – Overspending and Underprotection
(Singapore- Institute of South Asian Studies- November 2021)
Justice C.V. Wigneswaran M.P.