Sri Lanka is “bankrupt”, Prime Minister Ranil Wickremesinghe said on Tuesday (5), as the country suffers its worst financial crisis in decadesleaving millions struggling to buy food, medicine and fuel.
Wickremesinghe told lawmakers that negotiations with the International Monetary Fund (IMF) to revive the country’s “collapsed” economy are “difficult” because the South Asian nation of 22 million people entered negotiations as a failed country, and not in development.
“Now we are participating in the negotiations as a failed country. Therefore, we have to face a more difficult and complicated situation than previous negotiations,” Wickremesinghe said in parliament.
“Due to the state of bankruptcy our country is in, we have to present a sustainability plan for our debt to the IMF separately,” he added. “Only when they are satisfied with this plan can we reach a team-level agreement. This is not a simple process.”
Sri Lanka is in the midst of its worst financial crisis in seven decades after its foreign exchange reserves fell to record lows as dollars ran out to pay for essential imports including food, medicine and fuel.
Schools were suspended and fuel was limited to essential services. In several major cities, including the commercial capital Colombo, hundreds stand in line for hours to buy fuel, sometimes clashing with the police and military as they wait.
On Sunday, Sri Lanka’s Energy Minister Kanchana Wijesekera said the country had less than a day’s worth of fuel.
“In terms of fuel and food, our country would have to face this crisis at some point. Fuel was scarce. Food prices have gone up,” he said, adding that international crises such as Russia’s War in Ukraine things got worse.
“Due to the recent global crises, this situation has worsened and we who were in the frying pan have fallen into the oven,” said Wijesekera.
On Tuesday, Prime Minister Wickremesinghe said he expects a report on debt restructuring and sustainability to be presented to the IMF by August. Once an agreement is reached, a comprehensive loan assistance program will be prepared for a period of four years, Wickremesinghe said.
His speech in parliament was interrupted by opposition lawmakers chanting “Gota go Home” — a reference to President Gotabaya Rajapaksa, who was present.
For months, large numbers of Sri Lankans have been asking Rajapaksa to step down over accusations of economic mismanagement.
Wickremesinghe said that by the end of this year, inflation will rise to 60%.
“This will be a difficult and bitter journey,” said Wickremesinghe. “But we can get relief at the end of this journey. Progress can be made.”
The British government said on Tuesday that it is now advising all but essential travel to Sri Lanka due to the impact of the economic crisis.
Source: CNN Brasil
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