<
https://theconversation.com/how-governments-use-imf-bailouts-to-hurt-political-opponents-new-research-217390>
"Sri Lanka received a bailout from the International Monetary Fund (IMF) in
March amid soaring inflation, debt and a sovereign default.
In exchange for US$3 billion (£2.4 billion), the government committed to
spending cuts and tax and financial sector reforms. These have prevented Sri
Lankan wages from recovering after they fell by almost half in real terms
during the preceding financial crisis, leading to protests in the streets of
Colombo.
Sri Lankans’ experience of these measures has been far from uniform. Emerging
evidence indicates that the government — led by Ranil Wickremesinghe, part of
the Buddhist Sinhalese majority — has concentrated the burdens primarily on
ethnic minorities, who are the poorest in Sri Lanka and typically support the
opposition.
The government has sought to protect the elite, which is primarily Buddhist
Sinhalese, by avoiding imposing wealth taxes and only making small increases in
corporation tax. It has placed the costs of austerity on low-income people by
doubling the value-added tax rate to 15%.
It has also doubled the tax that people pay on pension-fund returns. Again,
this hits poor ethnic minorities hardest because they frequently earn too
little to pay income tax.
Unfortunately, this experience is part of a worldwide pattern. Our new book,
IMF Lending: Partisanship, Punishment and Protest, shows how governments lump
the burden of adjustment on opposition supporters while shielding their own
backers – in other words, using IMF programmes for political gain."
Cheers,
*** Xanni ***
--
mailto:xanni@xanadu.net Andrew Pam
http://xanadu.com.au/ Chief Scientist, Xanadu
https://glasswings.com.au/ Partner, Glass Wings
https://sericyb.com.au/ Manager, Serious Cybernetics
