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Sri Lanka’s finance minister presents budget amidst economic crisis and soaring defence spending

Sri Lanka’s finance minister presented the 2022 budget in Parliament today with a bombastic speech that praised the ruling regime and continued with the government's increased focus on military spending and 'national security'.

Basil Rajapaksa, a brother of both president Gotabaya Rajapaksa and prime minister Mahinda Rajapaksa, was full of praise for his siblings.

“There are three main responsibilities that any elected government must fulfill in any country in the world,” he said. “They are, national security, development, and social welfare. President Mahinda Rajapaksha is the only leader who fulfilled all three of these responsibilities during the same era. Such leaders are not frequently found on the world’s political arena.” He went on to claim that the elder Rajapaksa brother is “Asia’s most mature political leader” and said he had “rendered an extraordinary service to this nation”.

The finance minister continued applauded his other brother Gotabaya Rajapaksa as someone “fearlessly committed to change [the] direction” of Sri Lanka, from the previous government, which ruled until 2019.

‘National security’

“We have firmly consolidated peace and national security in Sri Lanka,” declared Basil Rajapaksa. “Extremism or terrorism has no place in this country. Our country is one of the most peaceful and stable countries in the world today.”

“We are reaping the benefits of peace after defeating terrorism,” he continued, referring to his brothers’ 2009 military campaign that killed tens of thousands of Tamil civilians.

Despite more than 12 years having passed since then, Sri Lanka’s military remains one of the largest per capita in the world.

“We will not abscond our responsibility for national security which is the foundation of freedom and prosperity,” he continued. “We have been able to ensure national security in line with the aspirations of the people. There is immense public support for this. Therefore, I am pleased to announce that we have been able to better strengthen ethnic harmony, political and economic stability, elimination of terrorism, and counter-extremism in the country.”

Last month, he presented the Appropriation Bill for 2022, with the largest budget allocation once more earmarked for the Ministry of Defence.

According to Janes, the proposed defence allocation accounts for 15% of total government expenditure for 2022, a 14% increase over the allocation in 2021.

Whilst the massive defence spending continues to grow, Rajapaksa also warned of “agents of foreign powers disguised as social activists are exerting a considerable pressure on our society”.

“Such so called activism can overthrow strong and populist governments,” he added. “It is not possible for a government alone to manage. Therefore, I invite all citizens of this country as responsible citizens to be vigilant about this situation.”

His warning comes as the Sri Lankan security forces continues to clamp down on critics, with journalists, poets and political prisoners jailed.

‘We did not let anyone take revenge’

In a surprising allocation, Rajapaksa went on to claim that his regime faced “continuous harassments” by the previous government and earmarked allocate Rs. 100 million “as compensation to those who have been politically victimized during the period 2015-2019”.

At the start of last year, the Rajapaksa administration established a Commission of Inquiry (COI) to Investigate Allegations of Political Victimization and to derail investigations of the Rajapaksa family and allies begun by the previous administration in 2015-19. 

Human Rights Watch criticised the commission noting that it “seeks to block investigations and prosecutions in emblematic human rights cases, overturn a murder conviction, reinstate security force members disciplined for serious misconduct, and protect Rajapaksa family members and others from investigations into fraud and money laundering”.

Ian Seiderman, legal and policy director for the International Commission of Jurists, slammed the commission stating:

“Recommending that action be taken against lawyers and prosecutors for carrying out their professional and statutory duties is an all-out assault on a free and independent bar and this recommendation must be summarily rejected,” Seiderman said.

“These painful memories are not forgotten neither by us nor by those who fought side by side with us,” Rajapaksa told parliament. “It is common to take revenge from one’s enemies after victory. However, we did not let anyone take revenge.”

Families of the disappeared still searching for justice

Rajapaksa went on to announce that an additional Rs. 300 million would be allocated “to do justice” to the families of the forcibly disappeared and missing.

Across the North-East, Tamil families of the disappeared have been protesting for years, demanding justice for their loved ones. To this date, however, the government has refused to comply with any of their demands. Instead, the families regularly face intimidation and surveillance by Sri Lanka’s security forces and intelligence officers.  Nevertheless, the demonstrations have bravely continued and just last month, families of the disappeared held a demonstration in Vavuniya demanding to know the fate of their forcibly disappeared loved ones. Over 80 parents have died without ever knowing what happened to their disappeared relatives or before those responsible were brought to justice.

Widespread criticism as crisis continues

“What use is such an allocation (for families of the disappeared) when the killers and abductors walk free?” questioned one Tamil activist when asked about the latest budget. “Especially when it comes from a regime as corrupt as this one.”

The Rajapaksas, and Basil in particular, have been accused of widespread corruption during their rule.

A 2007 leaked US embassy cable noted that Basil “worked for the Ministry of Mahaweli Development, where he earned the nickname "Mr. Ten Percent" for demanding a ten percent commission on every project”. “Embassy contacts say Basil has no close advisors and more enemies than friends in Sri Lanka because he makes a habit of trying to "buy people”,” the cable added, noting that at the time “Basil continues to be accused of significant corruption in his current position”.

Sri Lankan politicians were amongst those to join criticism of the budget, as soon as Rajapaksa’s speech ended.

“Nothing in it to address the major structural issues of fiscal and balance of payments deficits,” tweeted Colombo parliamentarian Harsha de Silva. “No new plans on investments, exports, technology and innovation. Nothing to address unbearable cost of living.”

Sri Lanka is currently in the midst of an economic crisis that has seen it average monthly food prices rising 63% in the past month. Earlier this year a Bloomberg model reported that Sri Lanka’s default probability was the highest in Asia with the organisation estimating a 27.9% chance of one-year default. Sri Lanka owes at least $2.5 billion in debt over the next 12 months.

Read the full text of the budget here.

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