Sri Lanka’s ‘worst ever crisis’

Rebecca RootFriday 23 September 2022

Sri Lanka is facing a crisis on multiple fronts – economic, environmental and social. Global Insight assesses the impact on the rule of law and human rights.

Miles-long petrol queues, empty shop shelves and fields producing only half the crops that they used to: these are the more obvious signs of Sri Lanka’s current economic crisis. The less visible are the meals some citizens are missing as a result of unaffordable food prices and the school time children have lost as the country tries to limit its power and fuel usage. ‘Two years ago, there was a good situation living here, but this year the country has gone into an abyss’, says MGS Bandara, an army officer turned paddy farmer from Theldeniya, Kandy in Sri Lanka. People, he believes, are more depressed now than they were during the civil war, which gripped the country between 1983 and 2009.

For several months, Sri Lanka has been in the throes of an economic crisis that borders on a humanitarian disaster, one that’s wreaking havoc on the rule of law. As a result, international support should come with the caveat of instilling democratic rule as well as a green recovery, experts say. ‘[We] want the international community to be in solidarity with us, promoting democracy, human rights and rule of law’, says Vinya Ariyaratne, General Secretary of Sri Lanka’s largest local non-governmental organisation (NGO), Sarvodaya. He calls the situation – which has seen political turmoil, countrywide protests and subsequent arrests – a ‘full social crisis’.

Anatomy of a crisis

It began with the country’s foreign currency reserves, which had been running low for years, reaching a tipping point earlier in 2022. Insufficient funds meant the government defaulted on international debt and couldn’t afford to import necessities such as medicines, food and fuel. ‘[Elective surgeries] are being indefinitely postponed due to a lack of medicines, devices and supplies and some doctors and healthcare workers aren’t able to reach the hospital [because of the fuel crisis]’, Ariyaratne explains.

Shortages, combined with the global repercussions of the war in Ukraine, have also seen food inflation rise, at times to over 90 per cent, making it difficult for some to afford to eat. According to the UN’s World Food Programme, over 86 per cent of households are having to reduce the size of their meal portions or skip meals altogether. ‘Even the middle class have found it increasingly difficult to survive’, says Ariyaratne.

In March, the shortages triggered protests as citizens took to the streets to voice their concerns over the government’s handling of the situation – and their involvement in creating it. There were allegations of corruption and poor economic decision-making. As they increased in size and intensity, it was these protests that eventually forced President Gotabaya Rajapaksa to flee the country and resign in July 2022.

As a member of a political dynasty, he – alongside other family members – has been repeatedly accused of corruption, cronyism and incompetency. The family has denied the allegations levelled at them over the years. ‘It’s not just about economic problems. It’s also about political dysfunctionality […] the fact that the powerful executive has always undermined public institutions, that the public sector is politicised, the fact that the central bank is not independent’, says Ariyaratne.

And such a breakdown of law has had a direct impact on the economy, says Nusrat Hassan, Co-Chair of the IBA Agricultural Law Section and co-managing partner at Link Legal, Mumbai. The current situation, he believes, is a result of 15 years of authoritarian misrule by the previous government.

The new Sri Lankan President – and six-time Prime Minister – Ranil Wickremesinghe said in early August that there was no point blaming Rajapaksa for the economic crisis, however, and instead urged all to come together to tackle the economic crisis.

Ultimately, it’s an economic crisis underpinned by a political and constitutional crisis, explains Sakuntala Kadirgamar, Executive Director of the Law & Society Trust, a Sri Lankan not-for-profit organisation.

Climate emergency

There’s an additional element at play within the crisis, however. While Vinod Malwatte, Executive Director of the Lanka Environment Fund, believes years of political mismanagement to be the main driving force behind Sri Lanka’s current crisis, the climate emergency hasn’t helped. ‘What we’re seeing here isn't heavy natural disasters, but the changing of seasons and intensification of drought periods and then intense rains so [there’s] topsoil loss and the productivity of lands is going down’, he says. This, compounded by an ageing farming population, has hampered the country’s production of agricultural exports and thus lowered the income it generates.

In 2019, the export of goods – including coconuts, rice and tea – and services in the country amounted to 23 per cent of gross domestic product. But, according to the Asian Development Bank, rice production in particular could drop by 12-41 per cent in the next 40 years as a result of the climate crisis, making a further dent in the economy.

A severe economic blow was dealt back in May 2021, when Rajapaksa announced that Sri Lanka would be the first country to cease using chemical fertilisers. All imports of such products were banned. At the time, Rajapaksa said organic fertiliser would limit the negative effects of chemical products on both the environment and people’s health. Chemical fertilisers can, according to the UN Environment Programme, contaminate water sources and biodiversity while leading to noncommunicable diseases and contributing to the climate crisis ‘through emissions of the potent greenhouse gas, nitrous oxide’.

Rajapaksa said the ban would save the money that the government would otherwise have spent on healthcare costs in the future, as well as up to $400m spent annually on the importation of chemical fertiliser. But no information was shared with the farmers about how organic fertiliser would work – and there was little order to the policy’s rollout, MGS Bandera says. In fact, there was a period in which neither chemical nor organic fertiliser was available to certain farmers. ‘This was a really quick move taken by the government’, adds Bandera.

Such a sudden transition resulted in overall food production in Sri Lanka falling by between 40 and 50 per cent in the most recent harvest season, compared to the previous year. The reduction in farmers’ crop yields had an impact on their own household earnings but also that of the country as a whole. According to the Office of the United Nations High Commissioner for Human Rights, the ban ‘deepened’ the economic and debt crisis.

‘Economically, it [was] a big blow to the Sri Lankan economy, there’s no doubt, and you almost came to a situation that you were importing food, which also drained the FOREX [foreign exchange] reserves’, explains Jeevethan Selvachandran, Communication Consultant at COBO Consult and a South Asia specialist with a focus on Sri Lankan and Indian socio-cultural and politico-economic issues.

Selvachandran asks, ‘if you have a country which for a long time has not had a proper political and economic set up, can you cope with that change in a day?’

Following protests by farmers across the country, the ban was lifted in November 2021 but chemical fertiliser is no longer subsidised, making it expensive and therefore inaccessible for many. As such, certain yields have not yet returned to their former levels.

While the climate emergency and efforts to protect the environment may, in one regard, have contributed to the current economic situation, Ambika Satkunanathan, a human rights lawyer and the former Commissioner of the Human Rights Commission of Sri Lanka, believes the economic crisis will, in turn, exacerbate the impact of the climate crisis in the country. ‘The government might be able to dismiss objections to development projects that are harmful to the environment by pointing to the dire economic need’, she says. ‘In the context of Sri Lanka’s history of development projects that have adversely impacted the environment, [they have] often [been] done without environmental impact assessments [EIAs] being undertaken or [there have been] reports of EIAs being ignored. This is cause for concern.’

At the same time, the higher price of food means people are looking to grow their own crops, explains Vinod Malwatte of the Lanka Environment Fund. But agricultural expansion puts yet more pressure on the environment.

Millions need aid

Over 6.7 million people in Sri Lanka are thought to require humanitarian aid. To tackle the increasing levels of hunger and address the humanitarian fallout of the crisis, various UN agencies have launched appeals, while aid organisations, such as World Vision, Save the Children and the International Federation of Red Cross and Red Crescent Societies are providing cash grants and food donations. Sri Lanka’s government – under the leadership of Ranil Wickremesinghe – is also working with the International Monetary Fund (IMF) on an economic bailout plan. So far, there has been preliminary agreement on a $2.9bn loan for the country, which is $50bn in debt.

The next step will be for the IMF’s offer to be internally approved but this will, to some extent, depend on Sri Lanka’s ability to work with China, India and Japan to restructure its remaining debt with them and to commit to certain economic measures that will reduce the fiscal deficit. These include engaging in a four-year programme that would see a shift, and potential increase, in certain taxes as well as in the price of electricity and fuel. In his first budget, Wickremesinghe also announced plans to redirect government funds into schemes that will provide relief to those in need.

Throughout such negotiations, the international community should, according to Malwatte, take the opportunity to encourage the rebuilding of the economy in a way that protects the environment. Sri Lanka has ratified environment-focused protocols including the Commonwealth Blue Charter and the Paris Agreement. ‘But on the ground we don’t see some of those coming to fruition’, Malwatte says.

The international community, he adds, should stipulate that as part of any loans or bailouts, the country’s nationally determined contributions, as per the Paris Agreement, must be taken forward. Other countries should ‘say “we'll give you a loan but we also want you to honour these or have X amount of blue carbon projects or nature-based solutions”’, he explains.

Selvachandran suggests a commitment to investing more in solar energy and in reducing diesel, which would both save the country money and be better for the environment. Petrol imports in the country totalled $1.27bn in 2020 and as the country’s purse strings were pulled tighter, fuel was one of the first imports to be affected. Across the country, queues for petrol lasting over three days, and sometimes over ten, have become commonplace. But green initiatives, Selvachandran says, cost money that the country doesn’t have. He fears that climate policy will end up becoming the last priority on the government’s list, despite historically being a high priority issue for the country.

For Alan Keenan, a Senior Consultant on Sri Lanka for the NGO International Crisis Group, the bailout conversations are also an opportunity to reinforce the rule of law. Countries should say they will only approve the IMF’s support, he says, if the government commits to following basic democratic rules and strengthening rule of law institutions – both of which are currently under threat.

In July, a group of UN human rights experts took a similar stance as they urged international financial institutions, private lenders and countries to ‘come to the country’s aid’ but to do so by placing human rights at the centre of any solution. ‘Time and again, we have seen the grave systemic repercussions a debt crisis has had on countries, exposing deep structural gaps of the global financial system, and affecting the implementation of human rights’, said Attiya Waris, the UN Independent Expert on foreign debt, other international financial obligations and human rights and one of the aforementioned UN human rights experts, in a statement at the time.

Threatening the rule of law

Such fundamental rights include those relating to peaceful assembly and expression during peaceful protests, as per the 1978 Constitution of Sri Lanka. One of Ranil Wickremesinghe’s first actions when he replaced Rajapaksa as President in July was to declare a state of emergency and forcibly remove protestors who had set up a camp at the Galle Face site, near the presidential offices in Sri Lanka’s largest city, Colombo. The protestors were demanding the government address systemic corruption and bring in political accountability while also calling for Wickremesinghe ‘to go home’. The protestors, some of whom had been there for three months, had already agreed to disband and retreat.

Forced removal shouldn’t be undertaken, Ariyaratne says, unless there’s a threat to public security. While some protestors broke into and overran government buildings, including the President’s official residence, on 9 July, the protests have largely been reported as peaceful. The protestors at the Galle Face weren’t being violent, Ariyaratne explains, making the use of force unwarranted and a breach of human rights.

In what UN human rights experts have called a concern and misuse, Wickremesinghe’s re-imposed state of emergency crept beyond July and into August. This gave authorities additional powers they wouldn’t otherwise have had. ‘They’ve used these powers to go after the protestors’, explains Sakuntala Kadirgamar of the Law & Society Trust, who adds that this is in line with the country’s culture of impunity and violence whereby the rule of law is threatened. ‘We have on our statutes the Prevention of Terrorism Act, which provides for arbitrary detention’, allowing people to be in custody for years without being charged, she explains.

In the days following Wickremesinghe’s ascension to President, dozens of protesters – including a popular actress, Damitha Abeyratne – were detained by authorities and had their homes raided, while travel restrictions were placed on them. In a video that went viral, prominent protestor Danish Ali can be seen being forcibly removed from a flight. ‘The witch hunt against the protesters has intensified’, Satkunanathan agrees. As a result, she and a colleague have filed what she calls a fundamental rights petition, which challenges the many arrests of protestors. According to Satkunanathan, these arrests were undertaken by men in civilian clothing who didn’t introduce themselves or use official vehicles, while detainees’ families and lawyers were not informed of the protestors’ place of detention.

Such actions, explains Satkunanathan, threaten the rule of law, entrench impunity and undermine the constitutionally protected rights of the citizens. ‘The aim clearly is to silence dissent. The aim is to create fear’, she says. The UN human rights experts say these measures ‘close avenues for dialogue and maintain a political climate prone to an escalation of tensions’.

In late July, Wickremesinghe’s office stated that non-violent protests against his government would be allowed to continue, with a spokesperson declaring that ‘President Ranil Wickremesinghe has reaffirmed Sri Lanka's commitment to upholding the rights of peaceful, non-violent assembly’. But Keenan believes Wickremesinghe’s actions thus far are designed to send a message to those tempted to protest in future ‘that they will be putting themselves at risk of legal action and possibly worse’. Nonetheless, the arrest of Joseph Stalin, General Secretary of the Ceylon Teachers Service Union, in early August sparked another protest, as citizens took to the streets and shared their outrage about what they perceive as injustice.

A history of brutality

Keenan says things may get worse once there’s further detail as to what the Sri Lankan government is going to do and the measures it will impose to win IMF support. It’s likely to mean higher taxes, loss of government jobs, a reduction in military budget or the selling of state-owned enterprises. ‘None of those will be popular’, says Keenan, who calls the situation dangerous because of the country’s history of violent uprisings and oppressive crackdowns.

The country’s civil war began with a series of riots led by the Sinhalese Buddhist majority against the minority Hindu Tamil population, following the deaths of 13 soldiers at the hands of the militant organisation the Liberation Tigers of Tamil Eelam. Nobody has really reckoned with the country’s past of brutality, Keenan says. Now, Sri Lanka is facing its worst ever crisis.

For Hassan of the IBA Agricultural Law Section, these kinds of situations often mean human rights bear the heaviest brunt and that people are likely to witness a complete or partial breakdown of institutions. ‘It will be of utmost importance for any government which is taking charge under these given circumstances to ensure that the rule of law is re-established and upheld to provide confidence to the people and restore their faith in institutions’, he says. ‘Failure to do so would lead to gross human rights violations and further lead to a deepening of the economic crisis’, adds Hassan.

In striving for economic stability, Satkunanathan says that Sri Lanka’s government must provide political and social stability too. ‘But most importantly, citizens should feel secure, and they should feel the state is a protector of their rights rather than a predator.’

Rebecca Root is a freelance journalist based in Bangkok, covering humanitarian issues. She can be contacted at rebeccaroot1@gmail.com