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Conflict Weekly
Sri Lanka's IMF deal and Violence in Haiti

  IPRI Team

Conflict Weekly #168, 23 March 2023, Vol.4, No.12
An initiative by NIAS-IPRI and the India Office of the KAS

Chrishari de Alwis Gunasekare and Apoorva Sudhakar

Sri Lanka: IMF's approval of EEF program

Chrishari de Alwis Gunasekare

In the news

On 21 March, Sri Lanka received the approval for its 17th IMF program, an Extended Fund Facility Program (EFF) of USD 2.9 billion, to be disbursed over four years. The program was finalised approximately 200 days after Sri Lanka reached the Staff Level Agreement with the IMF in September 2022.

On 22 March, President Ranil Wickremesinghe delivered a special address to the Parliament, emphasising reforms alongside austerity as the way forward for Sri Lanka. He stated: "We are now starting a new journey. We have to introduce many economic reforms throughout the process. The foundation for our success will be through this path… We are currently going through a difficult period. We are well aware that a certain section of the society is facing immense hardships due to the tax burden. We also know the entire society is suffering due to inflation. However, we cannot distance ourselves from the policies that have been implemented at this crucial juncture."

Issues at large

First, the conditions for receiving IMF support. The objective of the IMF's EFF is to support countries facing economic hardships due to structural impediments. For Sri Lanka, the program would seek to improve the reserve position, which has been in a critical state since January 2022, causing the country to default in April 2022. The IMF has made it clear that the funds received through the EFF can only be utilised for reserve support and not for budgetary support, thereby restricting the funds to the Central Bank. However, the disbursement of funds will be conditional for Sri Lanka, which should reach the predetermined targets set by the IMF, aiming for structural reforms to prevent another economic failure.

Second, the current social situation in the country. The ongoing economic crisis remains a concern to the average Sri Lankan citizen, and it has worsened after the austerity measures that were introduced to secure the IMF program. Two major reforms were the income tax hike of 36 per cent to address the issue of low public revenue and the increase of the electricity tariffs by 66 per cent, placing an additional burden on the public. Inflation was as high as 53.2 per cent in February 2023. Nearly 5.7 million people in Sri Lanka need humanitarian assistance. Households have adopted negative coping strategies such as reducing meals, postponing medical care, and pulling children out of school to make ends meet. In 2022, about 1.1 million Sri Lankans migrated following the economic crisis and the brain drain. Therefore, the country's current situation is at an all-time low, as evidenced by the ongoing island-wide trade union agitations by several government sector employees demanding relief.

Third, the question of democracy. The root cause of Sri Lanka's economic crisis was a lack of good governance and political corruption. The failure of the Sri Lankan government to hold the local government elections is alarming and cripples democracy from running its course. The local government elections scheduled every four years were last held in 2018 and scheduled to be held in 2022 but were postponed by the government without citing any reasons. The elections were scheduled for 9 March, but they were again delayed to 25 April due to the lack of funds. The estimated cost for the elections is LKR 10 billion, which, according to the government, the State Treasury cannot bear.

In perspective

First, Sri Lanka is in an unenviable position of securing its 17th IMF program. The receipt of the IMF program should not be viewed as a bailout but as an opportunity to restore Sri Lanka's credibility in the international financial markets and as a first step towards economic recovery. The Sri Lankan government will have to work towards numerous reforms, such as increasing public revenue, managing state expenses, and addressing the issue of loss-making State Owned Enterprises (SOEs), some of which are already underway. Nonetheless, these reforms would be successful only if the government chooses to address the issues of good governance, compliance, and corruption, as these appear to be the root causes of the Sri Lankan economic crisis.

Second, the hardships Sri Lankan citizens face due to the economic crisis will likely continue, despite securing the IMF program. The conditions to receive the EFF impose structural readjustments that the IMF noted would be "brutal" are set to be borne by the citizens, particularly the vulnerable communities.

Third, a ray of hope. The IMF program is undoubtedly a lifeline for Sri Lanka at this critical juncture. This will enable Sri Lanka to pour resources into the export and tourism sectors, which already show signs of recovery, and to relook at foreign investment opportunities. In the long term, the structural adjustments imposed by the IMF, if successful, will create the foundation for a more robust and much more stable economy in Sri Lanka.

Haiti: Gang violence worsens as hundreds killed since the beginning of 2023

 Apoorva Sudhakar

In the news

On 21 March, the UN High Commissioner for Human Rights (OHCHR) revealed that as of 15 March, 531 people had been killed in gang violence since the beginning of 2023; the violence also left 300 injured and 277 kidnapped. The OHCHR said that violence has increased and become frequent because gangs attempted to expand their territories in Port-au-Prince.

On 18 March, Prime Minister Ariel Henry promised to mobilise all security forces to tackle gang violence in his address at the Haitian Armed Forces headquarters. An official from the Defense Ministry's press confirmed the same with the Associated Press and outlined plans to activate the military.

On 16 March, the head of the UN's Integrated Office in Haiti, Helen La Lime, said the international community's current training and resources to fight gang violence in Haiti were inadequate. La Lime reiterated a call for specialised foreign forces and highlighted the need for new partnerships.

Issues at large

First, continuing gang violence in Haiti. According to the Crisis Group, there are around 200 gangs in Haiti, most of which operate in the capital Port-au-Prince. They can broadly be divided into two alliances, the G9 and Gpep. As of December 2022, these gangs controlled nearly 60 per cent of Port-au-Prince. The gangs use physical and sexual violence and engage in extortion, murder, drug trafficking and abductions, which has displaced over 160,000 people.

Second, continuing political instability. Haiti had been battling a political crisis prior to the assassination of President Jovenel Moise in July 2021; he was ruling by decree since September 2020 after Haiti failed to conduct legislative elections in 2019. Following the assassination, Haiti had few senators remaining in power after failed attempts to hold elections. However, Prime Minister Henry postponed the polls, and in January 2023, their terms expired, leaving the House and the Senate without a single legislator.

Third, the humanitarian cost. In May 2022, UNICEF said gang violence had left 500,000 children without access to education as 1,700 schools in and around the capital had to be closed down. The UN Office for the Coordination of Humanitarian Affairs said 336,000 people were affected by cholera, as people were cut off from a clean supply of water. Further, as of October 2022, 4.7 million people were facing acute hunger, including 19,000 living in "catastrophic famine conditions" in an area controlled by gangs.

Fourth, international response. Currently, only the police forces are authorised to tackle the gangs. In October 2022, Prime Minister Henry and the Council of Ministers requested the UN to deploy an international armed force to tackle the gangs. UN Secretary-General Antonio Guterres backed the request. However, despite multiple appeals, Haiti and the UN could not garner the support of any country other than the US.

In perspective

First, gang violence is not an isolated contemporary problem in Haiti. It is the outcome of a prolonged political crisis that began decades back when politicians began using gangs to intimidate the opposition. Today, Haiti struggles to tackle the problem that was once used as means to maintain political power. The expiry of the Senators' terms will likely create a vacuum in Haiti's political system and exacerbate the problem further.

Second, the prevalence of violence despite the authorisation of police indicates that the forces are inadequate and ill-equipped to stem the violence. However, foreign military intervention comes with its disadvantages and should be a path chosen with caution.

 Issues in Peace and Conflict This Week:

Regional Roundups

Akriti Sharma, Ankit Singh, Rashmi Ramesh, Apoorva Sudhakar, Anu Maria Joseph, Femy Francis, Harini Madhusudan and Padmashree Anandhan   

East and Southeast Asia

China: Military drives away US destroyer in the South China Sea

On 23 March, a spokesperson from China's Southern Theatre Command (CSTC) reported that it monitored and drove away a US destroyer illegally passing by the Parcel Islands in the South China Sea. The spokesperson said: "The theatre forces will maintain a high state of alert at all times and take all necessary measures to resolutely safeguard national sovereignty and security and peace and stability in the South China Sea." The statement accused the US of entering China's territorial waters without prior approval and undermining peace and stability in the region.

China: Population in Beijing city declines for the first time in two decades

On 21 March, China's official data revealed that the population in Beijing declined for the first time since 2003. The city has a population of 21.84 million people. In 2022, the death rate in Beijing rose to 5.72 deaths per 1,000 people, while the birth rate fell to 5.67 births per 1,000 people. However, the decline in the population is not surprising as the trend is in line with the national statistics, which follow a similar decline. A senior research fellow from the Centre of Policy Studies at Victoria University in Australia said: "Given the high living and education costs and education levels in Beijing, it is very normal that the birth rate of permanent residents is low."

Central Asia, the Middle East, and Africa

Yemen: Renewed fighting in Ma'rib

On 21 March, new clashes erupted when the Houthis attacked the Harib district of the Ma'rib province. The attack comes against the backdrop of continuous efforts from the UN to renew the truce after it expired six months ago. The Houthis have made progress on the frontlines against Yemen, and the renewed fighting has caused the displacement of some families.

Lebanon: Protests against economic crisis

On 22 March, hundreds of people gathered on the streets of Beirut, in front of the government buildings, protesting against the country's worsening economic condition. The protest was called by retired members of the military and depositors who are primarily unable to access their savings due to bank controls. Clashes erupted during the course, and protestors hurled stones at the security forces. As a response, the security forces fired tear gas to disperse the crowd.

Syria: Israel strike on Aleppo airport

On 22 March, Israel conducted airstrikes targeting Aleppo airport in Syria. The Syrian defence ministry said Israel launched "a number of missiles from the Mediterranean Sea, west of the coastal city of Latakia, at 3:55 am." The attack reportedly caused some material damage. This strike is the second one this month and the third one in six months. There was no statement from the Israeli sources following the strike.

South Africa: Protests calling for resignation of Ramaphosa

On 20 March, the South African police reported that at least 87 people were arrested nationwide following the opposition's protests. The opposition minority party, the Economic Freedom Fighters (EFF), called for a national shutdown demanding the resignation of President Cyril Ramaphosa, accusing him of corruption and ending the energy crisis in the country. Meanwhile, Ramaphosa warned the protesters against damaging properties or harming other people. He told the protesters that their right to protest does "not give anyone the right to harass, intimidate or threaten anyone else." More than 3,000 soldiers were deployed across the country to safeguard key infrastructure.

Kenya: Opposition protests calling the illegitimate government

On 20 March, leader of Kenya’s main opposition party Azimo la Umoja, Raila Odinga, held countrywide protests against President William Ruto and his government. The demonstrations were against the high cost of living and what the opposition calls an "illegitimate government". The police fired tear gas against the protesters to block them from marching toward the city centre. One protester was shot dead after the demonstrations turned violent in the capital Nairobi.

Somalia: Nearly 43,000 died in the drought, says a joint report

On 21 March, a joint report by the Somali government and the United Nations said that at least 43,000 people were killed in the country amid the devastating drought, among which half are below the age of five. The reports mentioned that the crisis is "far from over," and that 18,000-34,000 more deaths are to be expected in the first quarter of this year. World Health Organization (WHO) representative Dr. Mamunur Rahman Malik stated: "We are racing against time to prevent deaths and save lives that are available." According to the UN, the country needs nearly USD 2.6 billion this year for the Somalia drought response. A five consecutive failed rainy season is said to have caused the dire humanitarian crisis.  

Ethiopia: TPLF removed from the terror list

On 22 March, the Ethiopian Parliament voted to remove Tigray People's Liberation Front (TPLF) from the country's terror blacklist. The decision comes four months after the group signed a ceasefire agreement with the federal government ending the two years of conflict.

Europe and the Americas

Ecuador-Peru: 15 killed in 6.8 magnitude earthquake

On 19 March, at least 15 people were reported dead in a 6.8 magnitude earthquake that hit southern Ecuador and northern Peru on 18 March. Among them, 14 casualties were recorded in Ecuador and the remaining one was in Peru. In Ecuador, at least 126 were also injured. Ecuador's presidential office stated: "All the ministries are activated and have sufficient economic resources to immediately repair earthquake damage."

Colombia: Fighting between armed groups fuel internal displacement, reveals Red Cross report

On 22 March, the Red Cross reported that the number of internally displaced people had increased since 2022, as armed groups were fighting each other to control rural pockets. The Red Cross report reveals that 123,000 people fled their homes in 2022, marking a 60 per cent increase from the figures of 2021. At the same time, confrontations between the army and armed groups had reduced. The head of the International Committee of the Red Cross delegation in Colombia said the ongoing conflict in Colombia could not be compared to two decades ago, wherein armed groups attacked police stations and kidnapped people from cities including Bogota and Medellin.

Panama: Number of migrants from Colombia increased since 2022, says government

On 22 March, the government said at least 50,000 migrants had climbed the Darien Gap (The D.G region is an imposing obstacle on one of the world's most dangerous migration routes.) linking Colombia to Panama in January and February 2023, marking a five times increase from the figures in the same time period in 2022. The People's Defense Office (PDO) said that in the two months, 9,683 migrants below 18 years had crossed the Darien Gap, indicating a seven-times increase in the number of minors compared to the same period in 2021; of these, 1,119 were unaccompanied minors. The Central America regional representative of the UN Human Rights Commission stated: "Year by year the number of migrants crossing through Panama grows, and the trend in the first months of 2023 suggests an unprecedented growth."

The US: Florida governor signs law banning teaching on sexual orientation

On 22 March, Republican Governor of Florida Ron DeSantis proposed to expand its ban on teaching young children about sexual orientation and gender identity issues to include all students in its public schools under a new rule set for a vote by the state Board of Education next month. Last year, DeSantis signed a controversial law banning teaching critical race theory in schools. DeSantis is seeking his party's 2024 nomination for president.

The US: Storms and rains wreak havoc in California

On 22 March, two persons were killed in a severe weather storm berating California with wind gusts reaching up to 95 km/hr. The authorities issued continued flood watches and severe rain advisories. California's persisting wet weather this winter, which included atmospheric rivers and February blizzards powered by arctic air, comes after years of droughts and wildfires. Scientists say climate change is to blame for that whiplash of weather extremes. 

The US: Four new military bases in the Philippines approved to be used by the US military

On 22 March, the President of Philippines, Bongbong Marcos, reached out to local government officials to convey the importance of the expanded US military presence in their areas. The Marcos administration announced last month that it would allow rotating batches of US forces to indefinitely stay in four new Philippine military camps in addition to five local bases earlier designated under a 2014 Enhanced Defence Cooperation Agreement (EDCA). The US has committed USD 80 million to infrastructure investments at the five current bases: the Antonio Bautista Air Base in Palawan, Basa Air Base in Pampanga, Fort Magsaysay in Nueva Ecija, Benito Ebuen Air Base in Cebu and Lumbia Air Base in Mindanao.

The US: Washington extremely troubled over new Israeli settlement law

On 21 March, the US State Department spokesperson, Vedant Patel, told reporters that Israeli law that paves the way for restoring illegal settlements in the north of the West Bank violates Israeli commitments to Washington over their ironclad partnership. The spokesperson called for honest and frank conversations between the leaders of the respective countries.

About the authors

Harini Madhusudan, Rashmi Ramersh, Ankit Singh and Akriti Sharma are Doctoral Scholars at the School of Conflict and Security Studies, NIAS. Padmashree Anandan is a Project Associate at NIAS. Anu Maria Joseph and Femy Francis are Research Assistants at NIAS. 

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