World · August 3, 2022

The Sri Lankan president warns that the economic crisis will continue into the next year

Sri Lanka faces “great danger” with fuel shortages triggered by its unprecedented economic crisis set to continue at least until the end of the year, President Ranil Wickremesinghe warned Wednesday.
The 73-year-old who was pushed to power last month after his predecessor Gotabaya Rajapaksa was forced to leave the country and resign after months of protests, said the financial meltdown turned into a major political crisis.
“Today we are facing an unprecedented situation that our country had never faced in recent history,” he said opening a new session of Parliament.

“We are in great danger”.

Sri Lanka will resume bailout negotiations with the International Monetary Fund (IMF) in August, Wickremesinghe said Wednesday, as he calls on lawmakers to form an all-party government to resolve a crippling economic crisis.
In a speech in parliament, Wickremesinghe said constitutional amendments were needed to curtail presidential powers, indicating it would fulfill a key demand from protesters who forced Rajapaksa to withdraw.

“The president of a country does not have to be a king or god who is exalted above the people. He or she is one of the citizens,” Wickremesinghe said.

The island nation of 22 million people is facing the worst financial crisis since independence from Britain in 1948, with its currency reserves at record lows and the economy hit by the COVID-19 pandemic and a sharp decline in government revenue. .
Angered by the persistent shortage of essential goods, including fuel and medicines, and skyrocketing inflation of more than 60% year-on-year, hundreds of thousands of people took to the streets in early July, forcing Rajapaksa to flee the country first. and then leave the office.
Mr. Wickremesinghe, who was then prime minister, assumed the post of interim president and was subsequently confirmed in the post by parliament.

Discussions with the IMF over a four-year program that could provide up to $ 3 billion ($ 4.32 billion) will resume in August, Wickremesinghe told lawmakers in his first major speech to Parliament since taking over.

The government is working with its financial and legal advisors Lazard and Clifford Chance to finalize a plan to restructure foreign debt, including about $ 12 billion owed to bondholders.
“We will present this plan to the International Monetary Fund in the near future and negotiate with countries that have provided loan assistance,” said Wickremesinghe.
“As a result, negotiations with private creditors would also begin to reach a consensus.”
A veteran lawmaker whose party held only one seat in parliament, Wickremesinghe won a leadership vote in the 225-member chamber last month with support from the country’s ruling party, dominated by the Rajapaksa family.

But the new president reiterated his call for a unity government, adding that he has already started discussions with some groups.

“I respectfully extend the hand of friendship to all of you. I confidently invite you to put aside the past and unite for the good of the country,” said Wickremesinghe.
Opposition MP Harsha de Silva supported the president’s proposal.

“We need to unite; specifically a multi-party or multi-party government for a limited time to work on creating this new #SriLanka on a common minimum schedule,” he said in a tweet.

With an interim budget that could be presented within weeks, Wickremesinghe said his government is working on a long-term economic plan.
This would include reducing government debt from Sri Lanka’s current level of 140% of GDP to less than 100% within 10 years and creating a budget surplus by 2025. He did not provide details.
Wickremesinghe, who has been accused by activists and human rights groups of cracking down on anti-government protesters, said peaceful struggle is a fundamental right but will not tolerate violence.

“I will not allow anyone to act outside the law,” he said.