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Sri Lanka workers defy strike ban to protest IMF bailout plan

President Ranil Wickremesinghe is facing public backlash over hefty tax hikes and austerity measures imposed to secure IMF funding.

Sri Lankan workers have gone on strike in defiance of a government ban to protest a bailout for the bankrupt island, which has forced the closure of some hospitals, banks and ports.

President Ranil Wickremesinghe is facing a public backlash over hefty tax hikes and austerity measures imposed to secure a much-needed bailout from the International Monetary Fund (IMF).

About 40 unions, including government hospital staff and bank employees, went on strike on Wednesday.

Doctors at Sri Lanka’s National Hospital in Colombo said only emergencies were treated, while appointments at private clinics and hospitals were cancelled.

Electricity workers and bank clerks also went on strike while dockers staged lunchtime protests in the capital’s port.

Patients wait for treatment behind the gates of a government hospital in Colombo (Ishara S Kodikara/AFP)

Wickremesinghe on Tuesday used his executive powers to effectively ban strikes by forcing “essential services” to stay at work, and government employees who flout the order risk losing their jobs.

Union leaders said Wickremesinghe told them on Saturday that he cannot cut income taxes as it was a condition of the IMF releasing a bailout package.

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

“A symbolic protest lasting one day will not faze the authorities,” he said. “We will have to act more forcefully.”

Since the end of 2021, the country has been facing the worst financial crisis it has experienced in more than seven decades, caused by a severe shortage of foreign exchange reserves.

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

Sri Lanka sought help from the IMF after it failed to pay its $46 billion foreign government debt last April, but is awaiting financial guarantees from China, the largest single bilateral creditor, that it is willing to take a write-down on loans to the South Asian nation.

The unprecedented economic crisis has led to serious shortages of food, fuel and medicines. The country is aiming to keep inflation under control ahead of the IMF bailout, which is expected by the end of this month.

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

Inflation fell from 51.7 percent in February to 50.6 percent in February, official statistics showed on Tuesday, and forecasts from the central bank and analysts indicate that inflation will hit single digits by 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 has no money to fund a local government election scheduled for March 9, sparking allegations that he used the economic crisis to stifle democracy.