Economy · August 3, 2022

Sri Lankan leader proposes a 25-year plan for crisis-hit nation – The Diplomat

Sri Lanka’s new president said on Wednesday that his government is preparing a national political roadmap for the next 25 years that aims to cut public debt and transform the country into a competitive export economy as it seeks a way out of the its worst economic disaster.

President Ranil Wickremesinghe in his speech to Parliament said that Sri Lanka needs long-term solutions and a solid foundation to stop the recurrence of economic crises.

Massive public protests have accused Wickremesinghe’s deposed predecessor, Gotabaya Rajapakasa, and his powerful family for years of mismanagement and corruption that bankrupted the nation and led to an unprecedented shortage of essential imports such as fuel, medicine and gas. kitchen. But many are still skeptical of Wickremesinghe and accuse him of trying to protect the former leader and his relatives.

Sri Lanka announced in April that it would suspend repayment of foreign loans. Its total external debt is $ 51 billion, of which it will have to pay $ 28 billion by 2027.

Wickremesinghe said his government has entered into negotiations with the International Monetary Fund on a four-year bailout and has begun finalizing a debt restructuring plan.

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“We will present this plan to the International Monetary Fund in the near future and negotiate with countries that have provided loan assistance. the upcoming negotiations with private creditors would also begin to reach a consensus, ”he said.

Wickremesinghe had previously stated that negotiations with the IMF were difficult due to Sri Lanka’s failure and that an early August target for a deal with the agency was not possible and is now slated for September due to of social unrest in the country.

He said the difficulties eased slightly with the reduction of power outages, the introduction of fertilizers for cultivation and the improvement of cooking gas distribution.

“Safety measures have been taken to avoid food shortages. Transport of essential medicines and medical equipment to hospitals has begun. The schools have been reopened. Measures are being taken to overcome the obstacles faced by industries and export sectors, “she said.

Instead of relying on foreign loans for fuel imports, Sri Lanka should initiate a system where export proceeds and remittances from foreign workers are used for purchases, Wickremesinghe said.

“We also need to limit selected imports to balance fuel payments. On the other hand, the fuel supply must be reduced. These difficulties should be endured until the end of this year “.

He thanked neighboring Indian Prime Minister Narendra Modi for giving Sri Lanka a breath of life by providing timely assistance through lines of credit and loans to purchase food, medicine and fuel.

Wickremesinghe said the government’s goal is to create a surplus in the primary budget by 2025 and reduce public debt, currently at 140% of GDP, to less than 100% by 2032.

“The economy should be modernized. Economic stability should be established and transformed into a competitive export economy. In this context, we are now preparing the necessary reports, plans, rules and regulations, laws and programs, ”she said.

“If we build the country, the nation and the economy through national economic policy, we will be able to become a fully developed country by the year 2048, when we celebrate the 100th anniversary of independence,” Wickremesinghe said.

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Wickremesinghe was elected president last month to complete the remainder of Rajapaksa’s five-year term, which ends in 2024. Rajapaksa fled the country after protesters, angered by economic hardships, stormed his official residence. and occupied several key government buildings.

Wickremesinghe cracked down on the protests and several leaders of the demonstrations were arrested on charges of trespassing and damage to public property. The protest camps set up in front of the president’s office were dismantled by armed soldiers who beat the demonstrators.

However, Wickremesinghe on Wednesday denied “hunting down” the protesters.

He said he will protect peaceful protesters and opened an office to handle complaints of any wrongdoing. People who have violated the law unknowingly or at the instigation of others will be treated “with compassion”, while those who have been intentionally involved in violence will be prosecuted, she said.

Wickremesinghe said that since young people took the lead in the protests and wanted a change in the political system, it will make room for more young people to participate in parliament in the upcoming elections.

“The next elections should be the mandate of young people. I believe that the creation of a new constitution with new attitudes to make room for young people is one of the main priority tasks. “

He sought friendship between political parties, saying that only a government of all parties can solve the country’s problems.

“The expectation of all the citizens of the country at this juncture is that all their representatives in Parliament will work together to build the country,” he said.