Sri Lanka flags civil service pay hike ahead of vote
By AFP
August 23, 2024 02:34 PM
Bankrupt Sri Lanka will offer hefty salary increases and higher pensions to civil servants, President Ranil Wickremesinghe's office said Friday just weeks before a poll in which he is seeking re-election.
Wickremesinghe is seeking a mandate in September's presidential polls for his efforts to repair the island nation's ruined finances after an unprecedented 2022 economic crisis and $46 billion foreign debt default.
Despite hiking taxes and reining in public spending, in line with an International Monetary Fund (IMF) rescue plan, his administration has backed a government committee's recommendation to boost public sector pay from next January.
"Regardless of which government is in power, there is a pressing need to increase the salaries of public servants," his office said in a statement.
The committee recommended increasing salaries by 25 to 50 percent, boosting pensions and expanding healthcare benefits for government workers.
"The proposals have received approval from both the cabinet and the treasury," the statement said.
The 2022 economic crisis saw months of food, fuel and pharmaceutical shortages across Sri Lanka and a contraction of 7.3 percent.
Wickremesinghe took office in 2022 after the home of his predecessor, Gotabaya Rajapaksa, was stormed by Sri Lankans incensed by the cratering economy and long lines for basic goods.
The island nation is still in talks with its international sovereign bondholders to restructure part of its foreign debt.
Wickremesinghe introduced tough austerity measures including the scrapping of energy subsidies and the doubling of personal income taxes soon after taking office.
The austerity measures were in line with an IMF agreement to secure a $2.9 billion bailout loan last year.
Wickremesinghe faces a formidable challenge at the September 21 presidential polls, with 38 other candidates contesting.
He is also under fire for refusing to fund a local government election last year, saying the country had no money to pay for it.
The Supreme Court ruled Thursday that he was guilty of violating the fundamental rights of Sri Lankan voters as a result and ordered it to be held as soon as possible.