Sri Lanka workers defy strike ban to protest IMF bailout plan

Sri Lankan workers have gone on strike in defiance of a government ban to protest against a rescue plan for the bankrupt island nation, forcing the closure of some hospitals, banks and ports.

President Ranil Wickremesinghe is facing a public backlash over steep tax hikes and spending cuts imposed to secure a sorely needed International Monetary Fund (IMF) bailout.

About 40 trade unions, including government hospital staff and bank employees, stopped work on Wednesday.

Doctors at the National Hospital of Sri Lanka in the commercial capital of Colombo said only emergency cases were being treated, while appointments were cancelled at private clinics and hospitals.

Electricity workers and bank tellers were also on strike while dock workers staged lunchtime protests at the capital’s port.

Wickremesinghe used his executive powers on Tuesday to effectively outlaw strikes by compelling “essential services” to remain at work, and government workers defying the order risk losing their jobs.

‘Difficult to live’

Union leaders said they were told by Wickremesinghe on Saturday that he cannot reduce income taxes as it was a condition of the IMF to release a bailout package.

Haritha Aluthge of the Government Medical Officers’ Association told reporters in Colombo that his union planned to continue its industrial action.

“A token one-day protest is not going to sway the authorities,” he said. “We will have to take stronger action.”

Around 2,000 port workers, already staging a work-to-rule, held a demonstration in support of that demand during their lunch break in Colombo.

“We are protesting because we are finding it difficult to live. This income tax bill must be removed if not we will ensure that there are more problems for this government,” Niroshan Gorakanage, convener for the Ports Trade Union Alliance told reporters.

Elsewhere, hundreds of government employees wore black clothes and armbands and flew black flags outside state buildings.

Most banks across the country were closed for the day as banking unions joined the strike, and government hospitals were hit as nurses staged a four-hour strike and doctors joined demonstrations, union officials said.

Since late 2021, the country has been struggling with the worst financial crisis to befall it in more than seven decades, triggered by a severe shortage of foreign exchange reserves.

The economic crisis led to months of protests that toppled President Gotabaya Rajapaksa in July last year.

Sri Lanka sought IMF help after defaulting on its $46bn foreign government debt last April but is waiting for financial assurances from China, its largest single bilateral creditor, that it is willing to take a haircut on loans to the South Asian nation.

The unprecedented economic crisis has caused severe shortages of food, fuel and medicines. The country is striving to keep a cap on inflation while waiting for the IMF bailout, expected by the end of this month.

Sri Lanka raised electricity tariffs by 66 percent last month, the second adjustment in six months, as part of implementing cost reflective pricing needed to secure the IMF relief package.

Inflation eased to 50.6 percent in February from 51.7 percent the previous month, official statistics showed on Tuesday, and forecasts by the central bank and analysts indicate inflation will hit single digits towards the end of this year.

Wickremesinghe, who was elected by parliament to replace Rajapaksa, says the economy contracted by 11 percent last year and the island will remain bankrupt until at least 2026.

He has also announced that the country did not have money to finance a local government election which was scheduled for March 9, prompting accusations that he was using the economic crisis to stifle democracy.