Hyper-Reforms amidst Hyper-Austerity

In an ongoing economic crisis whose fundamental causes the ruling class has absolute disinterest in tackling, an unelected President and an illegitimate government are on a legal and policy reform spree. Who can possibly keep up with or even comprehend all the changes that the current government has made, or is proposing to make? Here is a non-exhaustive list: since Ranil Wickremesinghe became President in July 2022, the government has already passed a Rehabilitation Act, instituted a new social welfare scheme called Aswesuma, introduced a new tax regime, and unveiled a domestic debt restructuring plan. 

Other policy and legal changes in the pipeline include: an Anti-Terrorism Act (ATA) to replace the current Prevention of Terrorism Act (PTA); a new architecture on women’s rights including the establishment of a National Commission on Women as well as legislation on gender equality and women’s empowerment; electoral reform at local and provincial-level; modernisation of the Muslim Marriage and Divorce Act (MMDA); ‘big-bang’ revision of the labour code; and an ‘Action Plan’ for ethnic reconciliation relating to five key areas, namely: legislation (including the establishment of a Truth and Reconciliation Commission), institutional activities, land issues, prisoner release, and decentralisation of power.[i]

This is an ambitious and sweeping agenda. But of these myriad legal and policy initiatives, which will in fact have a positive impact on those who need them the most? Which of these will address the pressing needs of the working people? Which will transform their lives for the better? Which will make them considerably worse, particularly women, the working class, the poor, and minority communities? Which ones are distractions or placebos? Which are meant to placate the international community that makes periodic demands on the government to conform to accountability for fin de la guerre crimes, while propping up a regime that violates the people’s right to franchise and to protest? 

The domestic debt plan that the government announced in June is rationalised as crucial to achieving consent from sovereign debt holders for similar restructuring of international debt obligations. According to the Central Bank’s proposal, holders of locally issued dollar-denominated bonds may choose one of three options: a 30% principal haircut with a six-year maturity at a 4% interest rate; or no principal haircut, with a 15-year maturity and a nine-year grace period at 1.5% interest rate; or the possibility of exchanging their holdings for local currency-denominated instruments, which entails no principal haircut and a 10-year maturity at the SLFR (Sri Lanka standing lending facility rate), as well as a 1% interest rate.[ii] Among these local bondholders are many superannuation funds including the Employees’ Provident Fund and Employees’ Trust Fund that will have to take a hit now in the form of write-off of government securities, as well as hits in the future through reduction in the rate of interest for its investments. 

The government is also proposing drastic reform of labour laws, “to move away from the current employee-friendly labour law system to a system that strikes a balance between the rights of the employee and the employer”, according to a senior advisor to the Minister of Labour and Foreign Employment.[iii] The main thrust of the proposed reforms, sugar-coated with gender-equality provisions, is to further informalise the labour force, with Labour Minister Manusha Nanayakkara castigating existing labour laws as “archaic [ones that] turn away investors.”[iv] Polity’s thematic section on women and labour in this issue contextualises why measures touted to increase women’s labour force participation are neither helpful to women in waged work, nor are a silver bullet to kill the economic crisis.   

Wickremesinghe has also replaced the Samurdhi poverty alleviation programme with another dubbed ‘Aswesuma’, eroding social protection further, in a period where greater numbers than ever before need support to weather unemployment and loss of livelihoods, rising consumer food prices, and higher costs for health and education. While billed by its advocates as an answer to the economic crisis, the Feminist Collective for Economic Justice has exposed the new scheme as intensifying vulnerabilities and creating conditions for social conflict.[v] The cumulative effect of these legal and policy changes will be felt not only by those who are economically most marginalised, but also the middle class. Even the professional strata whose fixed incomes are unchanged despite high inflation are reeling from the effects of the slash on their pay checks thanks to the new personal tax regime, and the implications of domestic debt restructuring on their chief financial security net.

Several other legal reforms in the pipeline relate to longstanding demands and struggles waged over decades. Take the case of the proposed ATA, which was tabled in Parliament in March 2023. This law will operate in conjunction with the Rehabilitation Act passed in January 2023, which gives the army, navy, and air force the authority to run so-called rehabilitation centres for those considered terrorists in military camps. Human rights activists have been calling for repeal (not reform) of the PTA of 1979 as a draconian law, which targets and harasses minorities, activists, journalists, and dissenting voices. According to the government, the new ATA will address these concerns. But critics point out that the bill falls short of international human rights standards relating to the protection of those detained under such laws, and that in any case the definition of terrorism in the law is far too wide.

Consider also the case of the reform of Muslim personal law in Sri Lanka. Some Muslim women’s organisations have been demanding its reform for more than 30 years. The changes they seek include raising the age of marriage, recognition of the right of women to be appointed as Quazis, and amendment to the marriage registration form to allow women to sign the registration form. The reform process made considerable progress in recent years, following the work of the Marsoof Committee in 2017. However, a group of male Muslim MPs appear to be hijacking the process to dilute the reforms. The Muslim Personal Law Reform Action Group (MPLRAG) has accused the MPs of “ignoring decades of work” on the reform of Muslim law in Sri Lanka and putting forward a set of “astoundingly regressive proposals.”[vi]

What of the proposal to establish a Truth and Reconciliation Commission (TRC), which received cabinet approval in May 2023? War survivors, rights activists, and the international community have been demanding truth, justice, and reparations for atrocities committed by the Sri Lankan army during the last phase of the civil war since May 2009. But who has any faith in the proposed TRC? The Tamil National Alliance MP M.A. Sumanthiran has said that the new draft on Sri Lanka’s TRC fails to meet minimum expectations in addressing the concerns of Tamils, particularly family members of those who disappeared in the final stage of the war.[vii] 15 civil society organisations based in the North and East of Sri Lanka have also categorically rejected the TRC, expressing the view that the “victim community has no confidence in any local commission or tribunal created by the Sri Lanka state.”[viii]

It is crucial to keep in mind that the government is undertaking this massive policy and legal reform initiative at a time of democratic crisis, when its legitimacy is in question following the aragalaya /porattam/ struggle and its repression. Local government elections due in March 2023 continue to be deferred indefinitely – varyingly attributed by the president to the lack of funds,[ix] electoral reforms currently being mooted,[x] and the lack of a unanimous decision by the election commission due to the above reasons.[xi]

In the meantime, Ranil Wickremesinghe has his sights set on the Presidential election, even if his estimate of his own popularity appears more delusional by the day. State finances are supposed to magically improve, and electoral reforms achieve consensus to be somehow passed by 2024, paving the way for a presidential election. Sajith Premadasa (Samagi Jana Balavegaya) and Maithripala Sirisena (Sri Lanka Freedom Party) have scrambled to be in that race. Only Anura Kumara Dissanayaka (National People’s Power), for now, is doubling down on his demand for local government elections, where prospects for a good show by the NPP seem most promising.

Amidst the bleak realities that have been piling up one after the other over the last six months, the only glimmer of hope seems to be the spirit of the people that continues to agitate, seeking a more just, more democratic, polity. 

18 July 2023.

Image source : https://bit.ly/44Nerga


[i] President’s Media Division. (2023). “President Instructs for the Expedition of the Action Plan for Reconciliation”. (9 June). Available at https://pmd.gov.lk/news/president-instructs-for-the-expedition-of-the-action-plan-for-reconciliation/

[ii] Al Jazeera. (2023). “The key points of Sri Lanka’s plan to restructure domestic debt”. (29 June). Available at https://www.aljazeera.com/economy/2023/6/29/the-key-points-of-sri-lankas-plan-to-restructure-domestic-debt

[iii] Fernando, Shenal. (2023). “Labour Ministry to streamline hiring and firing”. The Morning (20 July). Available at https://www.themorning.lk/articles/VDZCq9k8BOto7NcMIyMz

[iv] Newswire. (2023). “Minister makes 11-point proposal for reforms in labour sector”. (02 May). Available at https://www.newswire.lk/2023/05/02/minister-makes-11-point-proposal-for-reforms-in-labour-sector/

[v] Feminist Collective for Economic Justice. (2023). Social Protection for Sri Lanka: A Progressive Gender Sensitive Response to the Crisis (policy brief). Available at https://www.srilankafeministcollective.org/_files/ugd/06bf48_e91e38e5a22d47c2a3e3e1684201812c.pdf

[vi] Muslim Personal Law Reform Action Group. (2023). Statement: Muslim MPs Betray MMDA Reforms: Justice for Sri Lankan Muslim Women under Threat (13 July). Available at https://www.mmdasrilanka.org/statement-muslim-mps-betray-mmda-reforms-justice-for-sri-lankan-muslim-women-under-threat/

[vii] Aneez, Shihar. (2023). “Sri Lanka’s TRC draft has nothing to solve Tamils’ concerns – Sumanthiran”. Economynext (2 June). Available at https://economynext.com/sri-lankas-trc-draft-has-nothing-to-solve-tamils-concerns-sumanthiran-122216/

[viii] The Morning. “15 Civil society orgs. decline support to Govt.’s truth commission”. (13 July). Available at https://www.themorning.lk/articles/VnORGzE0TmnUI3XQOpMz

[ix] Srinivasan, Meera. (2023). “Ranil govt. faces mounting pressure for ‘attempt to postpone’ polls in Sri Lanka”. The Hindu (20 February). Available at https://www.thehindu.com/news/international/ranil-govt-faces-mounting-pressure-for-attempt-to-postpone-polls-in-sri-lanka/article66532339.ece

[x] Balachandran, P.K. (2023). “Poor prospect of elections in Sri Lanka till the 2024 Presidential poll”. Counterpoint.lk (18 February). Available at https://counterpoint.lk/poor-prospect-elections-sri-lanka-till-2024-presidential-poll-wickremesinghe-wants-put-economic-house-order-first/

[xi] Economynext. (2023). “Sri Lanka president claims local polls not delayed, points to lack of consensus”. (23 February). Available at https://economynext.com/sri-lanka-president-claims-local-polls-not-delayed-points-to-lack-of-consensus-113109/

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