Hit by COVID-19, the island nation’s economy is under strain
Sri Lanka’s ruling Rajapaksa administration will present its maiden Budget on Tuesday, amid a relentless second wave of COVID-19 that hit the island nation last month. Prime Minister Mahinda Rajapaksa, also the Minister of Finance, will unveil the Budget for the year 2021 in Parliament, and the final vote — after its third reading — is scheduled on December 10.
The Budget assumes significance, coming amid a devastating global pandemic. Sri Lanka’s foreign reserves are under enormous strain in the wake of mounting external debt — the government recently repaid $4.2 billion for this year — while its export and tourism sectors, and worker remittances from abroad, have been severely impacted. The budget comes a year after President Gotabaya Rajapaksa rose to power, promising his voters development and prosperity, and at a time when analysts have warned of a GDP contraction of possibly up to 10%, a low that the country did not experience even during its civil war years.
Meanwhile, the plight of Sri Lanka’s working people has come to the fore.
Not only because of the cluster that broke out at a garment factory near Colombo last month, putting the lives and jobs of several thousand workers at risk, but also because the threat of joblessness looms larger than before. Worker organisations are desperately looking for some respite in the budget, to help them cope.
According to Anton Marcus, joint secretary, Free Trade Zones and General Services Employees Union — representing workers from most of Sri Lanka’s garment factories — some 20,000 workers of the 300,000 employed companies affiliated to Sri Lanka’s Board of Investment have already lost their jobs. “There is a fear of even higher rates of joblessness in the coming months. So about 10 major unions have got together and submitted a proposal for an unemployment benefit insurance scheme. The budget will tell us if the government has taken it into consideration,” he told The Hindu.
Concerns on job security
Chamila Thushari, of Da Bindu Collective, an organisation working with women employed in the Free Trade Zones, too emphasised the need for the budget to address widespread concerns about job security. “It is very important that the government substantially widens social security. It is essential to allocate money to provide these workers with a cash assistance and essential goods in these bleak times.”
It is not just the garment sector workers who are worried. The over 100,000 workers in tea estates, another vital, foreign exchange- earning sector, are faced with heightened poverty and uncertainty since the pandemic hit. “In January, just ahead of Pongal festival, President Rajapaksa promised to raise their wages to LKR 1,000 a day (roughly ₹400). The demand for 1,000 rupees is now five years old and it is yet to be met. The pandemic has meant fewer days of work and even lesser wages [than the 700 they currently get],” said C. Ganesalingam, convenor of the Movement for Plantation People’s Land Rights. Further, with many hill country youth employed in capital Colombo losing their jobs and returning to the estates, the number of people to feed in each family has increased. “Some families tell us that they have two instead of three meals a day.”
“The pandemic has spared no one. But we have to see how it affects a community that has been neglected and marginalised for several decades. Only a comprehensive policy can help them in the long run. It must factor in job creation, say by ensuring access to agriculture sector, setting up small industries, housing needs, education infrastructure, better health and safety for workers,” he added.