Workers strike for fifth day, more unrest feared

•  Strikes spread to more free trade zones
• Unions vow more unrest until pension bill scrapped
• President orders 1 million rupees paid to dead worker’s family

COLOMBO (Reuters) — Thousands of Sri Lankan workers went on strike on Friday, the latest stoppage in five days of labour unrest supported by the Marxist opposition, which is staging its first major challenge to President Mahinda Rajapaksa’s six-year rule.

The strikes, over a government pension proposal and backed by the Marxist Janatha Vimukthi Peramuna (JVP), since Monday have disrupted work in four of Sri Lanka’s 12 free trade zones. Overall, they account for 13 percent of the country’s annual $8 billion in exports.

Sri Lanka’s traditionally influential unions have vowed more industrial action, which could hamper government efforts to revive foreign investment and boost economic growth.

The protests have shocked the Rajapaksa government, which has said it would withdraw the pension bill after Monday’s clashes wounded at least 200 people. One of four workers shot by police later died from his wounds.

On Friday, the president ordered 1 million Sri Lanka rupees ($9,111) in compensation to the family of the dead worker, officials said. Two police officers were arrested over the shootings and the police chief also stepped down.

Also on Friday, hundreds of Buddhist monks marched towards the president’s residence to protest the killing. A Reuters reporter saw police remove barricades to let them approach the heavily secured building in central Colombo.

Unlike most of his predecessors in office, Rajapaksa has so far avoided any serious challenge from Sri Lanka’s labour unions, whose dissatisfaction has often been a bellwether of political and popular unrest.

             

Rajapaksa’s popularity for ending a 25-year civil war has also given his government a largely free hand to do as it wishes, and the opposition has barely been able to mount an effective challenge to him since he declared victory against the Tamil Tiger insurgents in May 2009.

The government is under pressure to trim its big public sector wage bill under the terms of a $2.6 billion International Monetary Fund loan, which has resulted in Rajapaksa delaying on pledges to deliver promised wage and benefit increases.

The proposed private pension scheme would make workers wait longer to access their savings and add yet another cost to employers, who already pay big benefits in a nation with one of the highest numbers of annual paid days off in the world.

One union representing about 120,000 employees at all of the free trade zones, has threatened an indefinite shutdown if the pension proposal is not permanently shelved. The government has said it will withdraw the bill but reserves the right to bring it back later.