Courtesy Adaderana

The next three weeks will be tough for Sri Lanka, Prime Minister Ranil Wickremesinghe said today (June 07), urging the general public to use fuel and liquefied petroleum (LP) gas sparingly.

Delivering a special statement in the parliament this morning, the Premier stressed the need to limit unessential travel for the time being and to refrain from hoarding the products.

The government is in the process of rectifying the shortages in the country, he said, adding that negotiations are underway with various parties to ensure an uninterrupted supply of fuel, LP gas and fuel. Let’s face these difficult three weeks united and patiently.”

PM Wickremesinghe said the government’s primary focus is on restoring the economic stability in Sri Lanka. However, the economic stabilization alone cannot help the country ride out the crisis situation, he added. We need to revive the economy of our country.”

The country spends USD 500 million per month on fuel. It should be kept in mind that the current global crisis faces a risk of an increase in oil price. Some estimate that global oil prices will rise by as much as 40% by the end of this year. In this context, the idea of introducing a coupon system for fuel cannot be ruled out.  Somehow, we have to find USD 3,300 million worth of fuel for the next six months.”

It costs Rs. 40 million per month to import LP gas consignments, the prime minister said further, adding that the country is in need of USD 250 million to procure LP gas for the next six months. At present, the government utilizes multilateral assistance, local funds and Indian loans to purchase LP gas, he explained.

Speaking on the food shortage in the country, PM Wickremesinghe revealed that there are only 1.6 metric tonnes of paddy in stock at present, although the annual demand is 2.5 metric tonnes. He warned of a looming severe food shortage in the country in the coming months. We need to import food items to meet our daily requirements. It costs about USD 150 million a month.”

We are losing the international market for our export crops.  Action must be taken to prevent this,” the Premier said while stressing the need to supply fertilizer to the farmers without a shortage to uplift the cultivation of paddy, vegetables, fruits and export crops including tea, rubber and coconut. Fertilizer importation requires USD 600 million annually, added. Since manure has to be applied from time to time from the beginning to the end of a harvest. It is essential that fertilizer is exported without any shortages. We must ensure that no money or effort will be wasted.”

Speaking further, the prime minister noted that Sri Lanka needs USD 5 billion to ensure that the daily lives of the people are not disrupted for the next six months. In addition, another USD 1 billion is required to strengthen the rupee. This means we need to find USD 6 billion to keep the country afloat for the next six months.”

Pointing to the need to re-implement the tax structure that was in place prior to the tax cuts introduced in late 2019, the prime minister said the government incurred a loss to the tune of USD 650 billion as a result of this tax relief. We must begin our resurrection from where we fell.”

With regard to the assistance sought from the International Monetary Fund, PM Wickremesinghe said the discussions between the Sri Lankan government and the IMF officials are based on the country’s future economic plan.

We need to achieve economic stability by the end of this year. By 2024, we will have the opportunity to create economic stimulus through fiscal stimulus.  By 2025, our goal is to balance our budgets or create a primary surplus.  This economic program must continue to move towards this long-term goal.  Even if the individuals, groups and parties in power change, it is imperative that we achieve our national goals and maintain the highest level of efficiency in the country.”

Further, the prime minister highlighted the importance of paying close attention to the island nation’s foreign relations. To increase our international support, we are becoming a marginalized country in the world due to poor foreign policies.” 

PM Wickremesinghe said he is currently in constant consultation with foreign ambassadors. He has had telephone conversations with the Secretary-General of the Commonwealth, the President of the United Arab Emirates, the Prime Minister of the United Kingdom, the representatives of international organizations such as the United Nations, the United Nations Food and Agriculture Organization, the World Food Program, the United Nations Development Program and the World Health Organization.

Many representatives of these countries and international organizations have agreed to support Sri Lanka during this difficult time, the Premier added.

The United Nations has arranged a worldwide public appeal on the 9th of June. They are seeking support to provide humanitarian assistance to Sri Lanka. Through this project, they plan to provide USD 48 million over a four-month period to the food, agriculture and health sectors.”

Meanwhile, India, China and Japan are leading the list of countries that provide Sri Lanka with loans and assistance. Relations with these countries, which have always been strong, are now broken. Those relationships need to be rebuilt.”

The prime minister also pointed out that Japan and India had agreed to supply Sri Lanka with two LNG power plants. However, the CEB stopped these two projects without any justifiable reason, he added. Japan had also agreed to provide about USD 3 billion worth of projects to Sri Lanka by 2019. All of these projects were put on hold for no reason.”

Accordingly, the prime minister urged the Parliamentary Committee on Public Finance to conduct an inquiry into the suspension of such valuable projects granted to Sri Lanka by its long-time allies for unstated reasons.

Further, PM Wickremesinghe noted that the interim budget is the first step in rebuilding the country’s system. Once we have taken that step, we will implement a modern system and install safeguards that will protect us from future calamities. But to do all this, we need to restart the system. That is why we are presenting an interim budget to Parliament on the basis of our future economic plan and road map. As I mentioned earlier, our hope is that this budget will lay the foundation for our economy, allowing it to stabilize and recover.”

The interim budget will reduce unnecessary government expenditure while controlling other costs, the Premier continued, adding that the government also focuses on revitalizing many areas affected by the crisis. There is an urgent need to focus on many sectors such as the export economy, tourism and construction, he said further.