Sri Lankan Prime Minister Mahinda Rajapaksa has called for patience from his citizens as the country continues to face a severe economic crisis. He has asked that citizens continue to work together and abide by the necessary health guidelines during a difficult time. The Prime Minister has also asked the government to provide relief to certain sectors of the economy, including tourism, small and medium enterprises, and the agricultural sector. The government has also made efforts to reduce public debt, but these measures have yet to bear fruit. The Prime Minister has stressed the importance of the collective effort of citizens to help the country overcome this crisis.
COLOMBO, Sri Lanka (AP) – Sri Lanka’s President on Wednesday pleaded for patience amid the country’s worst economic crisis but promised better times.
President Ranil Wickremesinghe, in a keynote speech after the opening of a new parliamentary session, said he had been forced to make unpopular decisions to save the country’s finances, including by implementing measures such as higher taxes.
“Inflation rises during an economic crisis. The price of goods increases. The job is at risk. companies collapse. taxes rise. It is difficult for all sections of society to survive. However, if we endure this hardship for another five to six months, we can find a solution,” Wickremesinghe said.
He added that government employees would receive additional salaries in the third and fourth quarters of the year and that the private sector would also receive perks. Wickremesinghe said: “If we continue like this … the public would become wealthy and the sources of income would increase. The interest rate can be reduced. In another three years, current incomes can be increased by 75%.”
Sri Lanka is effectively bankrupt and has suspended repayments of nearly $7 billion in external debt due this year pending the outcome of bailout talks with the International Monetary Fund.
The country’s external debt exceeds $51 billion, of which $28 billion must be repaid by 2027.
A currency crisis has also led to shortages of essentials such as food, fuel, medicines and cooking gas. Massive protests over the past year have forced Wickremesinghe’s predecessor, Gotabaya Rajapaksa, to flee the country and resign.
Wickremesinghe has managed to stabilize the economic situation somewhat by reducing bottlenecks and allowing schools and offices to operate. But power outages continue due to fuel shortages, and the government is scrambling to raise money to pay government employees.
India became the first bilateral creditor to announce financial assurances to the IMF, and on Tuesday the President’s office shared with the media a statement from the Paris Club – a group of creditor nations including the US, Britain, France and others – that made similar assurances gave.
However, the IMF program depends on China, which owns about 10% of Sri Lanka’s external debt and has granted a two-year debt moratorium from 2022. However, a visiting US diplomat said last week that China had not done enough to meet IMF standards on loan restructuring.
“India has agreed to a debt restructuring and has given financial assurances. On the one hand, the Paris Club and India are continuing talks. We are in direct talks with China,” Wickremesinghe said.
“We are now working to unify the approaches of other countries and those of China. I thank all the countries that are supporting us in this effort,” he said.
Wickremesinghe also reiterated that he would ensure maximum power-sharing with the ethnic minority Tamils to resolve a longstanding conflict.
Tamil rebels fought for an independent state in the northeast of the country for more than 25 years until they were crushed by the military in 2009. According to conservative UN estimates, more than 100,000 people were killed in the conflict.
Resolving the ethnic conflict is crucial for Sri Lanka to enlist the support of the international community to rebuild the country’s economy.
Neighboring India has shown a particular interest in solving the problem due to internal pressures from its own nearly 80 million Tamils, who have linguistic, cultural and family ties to the Tamils in Sri Lanka.
Krishan Francis, The Associated Press
Don’t miss interesting posts on Famousbio
