Fair Is Foul – IMF Budget Unleashed

By TU Senan –November 18, 2016

TU Senan

An IMF authorised budget has been unleashed on Sri Lanka. In the budget speech there was an attempt to use a paltry list of meagre ‘goodies’ to hide the ‘instrument of darkness’ – severe austerity. Sections of the media attempt to make something of the few rupees of reductions on potatoes and dal. In fact, it has now been nicknamed the ‘Patola Budget’ in reference to the utter tastelessness of that vegetable but even that is a deception: this budget has the bitterest of aftertastes in its real intentions.

The small amount cut from funding defence is being redirected as part of the significant increase in the allocation for the president’s and prime minister’s office. Outrageously, the finance minister justified a severe cut in education funding by claiming the “reduction is due to unused 32 billion rupees from the last budget”, as though the education sector is in no need of new investment. Health and other significant services also face the shop. Privatised higher education is now on the cards, as well as profiteers getting their hands on what is left of telecom, transport and housing. On the one hand, there is an increase in working hours for university lecturers and, on the other, a significant tax concession for the super-rich.

This is a budget formed in full compliance with the IMF which recently sanctioned a loan of $1.5 billion. An additional loan from the World Bank and Japan adds up to around $2.2billion. The agreement with the IMF and the budget proposals read the same. 

The IMF loan is linked to direct attacks on the living standards of workers and farmers. The intention is to reduce the fiscal deficit to 3.5% by 2020, which was an impossible aim even during the period of significant growth in the last decade. What is buried beneath jargon such as ‘fiscal consolidation’, ‘state enterprise reform’, ‘investment facilitation’, etc, are plans to reduce the budget allocation for welfare and other state services, to increase tax, and to promote privatisation. The government already raised VAT from 11% to 15%. Disgracefully any critique of the impact of these attacks is dismissed by finance minister, Ravi Karunanayake as “hysteria created by the media”, as though no one is affected by it.

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