Blue Green Budget – the latest agenda statement of an exploitative economic system

Budget proposals for the year 2018 were presented in Parliament by Finance Minister Mr. Mangala Samaraweera on 9th November 2017. In these proposals the government has set out a development agenda to ensure economic growth, with the objective of building a prosperous nation by the year 2025.

According to the statement by the Minister of Finance, the government has been working to lay the foundation for a sustainable economy - working on the pillars of democracy and reconciliation – and building a social market economy with new industries and innovation to speed up economic growth based on the values of justice and equality. This direction is expected to be further strengthened through the budget proposals.

However, far from strengthening democracy, co- existence, justice, or equality, there is a strong growing suspicion that these budget proposals will contribute to violating the very core principles.

In particular, in violation of the democratic right of the people to contribute in the decision making of decisive economic principles directly impacting their lives, it is clear that these budget proposals have been designed on the lines of the International Monetary Fund (IMF) conditions.

This budget can be termed as the most direct statement of intent in implementing the key conditions stipulated in the loan agreement signed with the International Monetary Fund on 26th June, of reducing state expenditure and increasing revenue (by way of a tax reform), privatization of state services and institutions, removing tax incentives and other protective measures in place to protect local enterprises and producers, and the revision of labor and land laws that act as barriers for foreign investors.

These budget proposals recommend the revision of the legal structure as repeatedly highlighted by the International Monetary Fund and the World Bank in the past, to facilitate the provision of land, natural resources and cheap labor for foreign investments attracted to Sri Lanka.

We, the People’s Alliance for Right to Land (PARL) urgently draw attention to the following proposals;

  1. The revision of the Rent Act (No. 7 of 1972) in order to enable house ownership to foreigners.
  2. The revision of the Paddy Lands Act, (No 1 of 1958) and the Agricultural Lands Act (No 42 of 1973) to enable the cultivation of various crops.
  3. Revisions to the Shop and Office Employees Act, (No 15 of 1954) to relax the hours of work and other working conditions.
  4. Removal of trade barriers according to agreements between the World Trade Organization, and the removal of non-tariff import taxes in the next three years according to the principles of liberalization.
  5. Revision of the Land (Restrictions on Alienation) Act, No. 38 of 2014 which placed stipulations for land ownership for companies with foreign shareholding and the revision of the Land Development Ordinance to ease the selling and purchase of agriculture land

These are not new economic directives but the structural reform process of the International Monetary Fund that has been a failure and rejected in Sri Lanka and the world over. The incumbent governments of the day have tried to implement these proposals in the past several decades pressured by the international monetary institutions, but had to withdraw these proposals due to the mounting opposition from the people. Therefore,

We draw serious attention to several imminent dangers and repercussions if the proposals are implemented on the livelihood of the farmers, fisher community, and other small-scale producers which account for more than 40% of the population in Sri Lanka.

With the removal of import tax and other market regulations, the local producers will have to compete with foreign imported goods in the local market. The production of low priced agricultural and other products by producers from India, China and Pakistan that enjoy various subsidies from their countries have already placed local producers in a very difficult situation and they will totally lose out on their livelihoods under these proposals. The reduction of the budgetary allocation for Agriculture and other primary production for 2018 will further aggravate the situation.

The government plans to allocate land to overseas companies in a large scale will be further accelerated with the proposed legal revisions. Sri Lanka as a nation is still grappling with the numerous struggles caused by the dispossession of land in the name of national security and development and therefore further progression of this situation will plunge the country into massive socio-political struggle.

With the proposed labor law revision, investors will have the opportunity to exploit cheap labor. As mentioned above - farmers, fisher community and the rural community disposed from their lands will become slaves in urban factories and large-scale estates without guarantees of their basic labor rights.

The food security of the country will be adversely impacted with the promotion of producing goods targeting the export market, leaving the people of the country dependent on foreign markets for their food security.