The economic downturn that eventually led to the 2022 bankruptcy commenced on August 12, 1953, when the Dudley-JRJ government reversed its policy of sustaining an extensively subsidized rice ration, a staple since World War II.
The decision to withdraw the subsidy triggered widespread public discontent, climaxing in a nationwide strike (Hartal). In response to significant demonstrations, the government ultimately surrendered and abandoned its stance.
As the projected deficit surged tenfold within a month, Minister of Finance JR sought urgent financial aid or higher rubber prices from the US, yet these endeavours proved fruitless. Ultimately, the government had to tamper with the rice ration subsidy, which constituted 70 percent of the budget deficit. This action impacted all citizens, even the affluent, who paid significantly less for rice compared to its import cost borne by the State.
Over the ensuing 25 years, this practice persisted despite its detrimental impact on the economy, severe fiscal constraints, and the depletion of international reserves—often driven by politicians focused on securing victory in upcoming elections. However, in 1978, President JR Jayewardene assumed office and made the pivotal decision to terminate the subsidy, recognizing the urgent need for change.
He not only eliminated the subsidy but also introduced economic liberalization and deferred the 1983 general elections, at the cost of democracy though, this shift led to substantial development, greatly benefiting the nation and its populace.
It also underscores how decisions made by the government in the past, even seemingly minor ones, can exert a lasting impact on a country’s course.
Dudley Senanayake and Gotabhaya Rajapaksa both succumbed to the influence of rebellious masses, stepping down as heads of state in response to the inaugural and the third such uprisings, separated by a span of 69 years.
The subsidized imported rice, initially priced at 70 cents per measure with only a 30 percent local contribution, evolved into a necessity for citizens, cherished and supported by the state.
Any government attempting to alter the Hal-Potha [ration card] faced potential electoral calamity.
The 1952 UNP manifesto vowed Rice ration stays at 25 cents as long as Sun and Moon exist.
In the 1970 elections, the SLFP-led United Front pledged Rice from the Moon…
During the Free India movement in India under colonial rule, the term ‘hartal,’ distinct to South Asia, first emerged as a form of Strike Action.
Hartal involves a mass protest campaign where people voluntarily close shops, workplaces, schools, and transport services, abstaining from work and holding demonstrations to express disapproval of an unacceptable and unpopular ruling decision.
Two subsequent mass uprisings were documented. The second, on July 29, 1987, emerged as people protested the Indo-Lanka accord. The situation escalated with violent actions from JVP activists, prompting police intervention and resulting in 140 fatalities.
The second event encompassed a peaceful Aragala movement from April to July, culminating on July 9, when SLPP activists attacked the aragalists, and later, JVP arsonists set fire to 78 houses.
The UNP leadership’s insensitivity to social anxieties became evident through a sweeping price hike of 300 percent—from 25 cents to 70 cents per measure in one stroke—prompting widespread unrest.
The policy speech and budget announcement on July 23, 1953, intensified public discontent as it not only removed the rice subsidy but also imposed higher taxes on sugar, increased train fares, and postal rates, and eliminated free midday meals for school children.
Marxist parties, which included LSSP, CP, and VLSSP, wielded significant influence during this period, exercising control over more than 90 percent of the Trade Unions and establishing a well-organized branch network across various provinces.
The protest gathered participation from a variety, including the organized working class, urban and suburban residents, plantation workers, and supporters of the Federal and left-wing movements in Jaffna. Although the newly formed SLFP offered conceptual support, it did not actively engage in the campaign. SWRD Bandaranaike, the leader of the SLFP, presided over the Galle Face rally held on the same day. On the occasion of the budget presentation on July 23, 1953, a mass rally coordinated by leftist parties witnessed some supporters and workers defying organizers’ instructions, attempting to storm the Parliament, which led to riots.
The ensuing violence during the Hartal on August 12 reached an unprecedented level. The turmoil inflicted extensive damage on railway lines, resulted in the toppling of telegraph posts, and severely disrupted communication facilities. Protesters obstructed main roads using trees and logs, and buses were attacked and halted. The chaotic situation escalated throughout the day, with even women joining the protest.
In the lead-up to the Hartal on August 12, Leftist leaders conducted ‘factory gate meetings’ to educate workers and visited villages to disseminate the call, especially in their strongholds.
This effort established the worker-peasant alliance, a fundamental tenet of Marxist ideology.
The media establishments, including the Lake House, Times, and Radio Ceylon, mostly circulated pro-government and anti-Hartal propaganda.
In response, the LSSP and CP published special editions of their news sheets dedicated to the Hartal to counter these allegations and inform the public about the plans.
The Hartal witnessed widespread participation and fervent expressions of discontent across various regions, with the Western, Southern, and Sabaragamuwa provinces experiencing the most pronounced protests and violence. In several towns, mass uprisings unfolded, resulting in significant damage to coastal railways and confrontations with the Police that led to the loss of life.
Notably, in Kandy, University students staged a demonstration that escalated into a violent clash with the Police, resulting in hours of street fighting.
The Hartal emerged as a strong example of the people’s frustration and dissatisfaction with the government’s policies.
An active and courageous role was assumed by women during the Hartal, particularly in locations like Koralawella, Egoda-uyana, and Waskaduwa, intensifying the protests with their determination.
The timing of the Hartal, against the backdrop of Mao Zedong’s triumph in China and Fidel Castro’s assault in Cuba, left the ruling class bewildered, as the swift and resolute response of the people caught them off guard. As violence escalated on August 12, 1953, the Prime Minister and his Cabinet sought refuge aboard the British Warship HMS Newfoundland docked in Colombo harbour.
An emergency Cabinet meeting convened onboard, leading to the imposition of Martial Law in certain areas, accompanied by a 24-hour curfew and orders to “shoot at sight with impunity.”
Despite the use of tear gas and force, the rioting participants remained firm, resulting in nine reported deaths.
The following individuals tragically succumbed to the use of force: K. Edwin-Pettah, Almadurage Alwis–Ratgama, S. H. Rabel-Uragaha, T. M. Panagoda-Dodanduwa, S. K. A. Piyasena-Dompe; K. A. Sadiris-Dompe, S. K. A. Wickremasinghe Perera-Dompe, T. Sirisena-Kirulapona, Douglas Nicholas-Modera.
Addressing unrealistic election pledges and tolerating corruption within governance has yielded adverse economic outcomes. Effectively addressing national reconciliation, taxation, debt restructuring, privatization of state assets, and maintaining law and order necessitates a bold and skilled leader with robust international relations capabilities, ready to make difficult decisions prioritizing immediate requirements over future electoral concerns.