{"id":126412,"date":"2022-06-22T22:55:51","date_gmt":"2022-06-23T04:55:51","guid":{"rendered":"https:\/\/www.lankaweb.com\/news\/items\/?p=126412"},"modified":"2022-06-22T15:48:04","modified_gmt":"2022-06-22T22:48:04","slug":"sri-lankan-pm-says-countrys-economy-has-completely-collapsed-after-months-of-shortages","status":"publish","type":"post","link":"https:\/\/www.lankaweb.com\/news\/items\/2022\/06\/22\/sri-lankan-pm-says-countrys-economy-has-completely-collapsed-after-months-of-shortages\/","title":{"rendered":"Sri Lankan PM says country\u2019s economy has \u2018completely collapsed\u2019 after months of shortages"},"content":{"rendered":"

KRISHAN FRANCIS <\/span>COLOMBO, SRI LANKA THE ASSOCIATED PRESS\u00a0 Courtesy The Globe and Mail<\/span><\/em><\/span><\/h2>\n\n\n

Sri Lanka\u2019s debt-laden economy has collapsed\u201d after months of shortages of food, fuel and electricity, its Prime Minister told lawmakers Wednesday, in comments underscoring the country\u2019s dire situation as it seeks help from international lenders.<\/p>\n\n\n\n

Prime Minister Ranil Wickremesinghe told Parliament the South Asian country is facing a far more serious situation beyond the mere shortages of fuel, gas, electricity and food. Our economy has completely collapsed.\u201d<\/p>\n\n\n\n

While Sri Lanka\u2019s crisis is considered its worst in recent memory, Mr. Wickremesinghe\u2019s assertion that the economy has collapsed did not cite any specific new developments. It appeared intended to emphasize to his critics and opposition lawmakers that he has inherited a difficult task that can\u2019t be fixed quickly, as the economy founders under the weight of heavy debts, lost tourism revenue and other effects from the pandemic, as well as surging costs for commodities.<\/p>\n\n\n\n

Lawmakers of the country\u2019s two main opposition parties are boycotting Parliament this week to protest against Mr. Wickremesinghe, who became Prime Minister just over a month ago and is also Finance Minister, for not having delivered on his pledges to turn the economy around.<\/p>\n\n\n\n

Mr. Wickremesinghe said Sri Lanka is unable to purchase imported fuel, even for cash, because of heavy debt owed by its petroleum corporation.<\/p>\n\n\n\n

Currently, the Ceylon Petroleum Corporation is US$700-million in debt,\u201d he told lawmakers. As a result, no country or organization in the world is willing to provide fuel to us. They are even reluctant to provide fuel for cash.\u201d<\/p>\n\n\n\n

Mr. Wickremesinghe took office after days of violent protests over the country\u2019s economic crisis forced his predecessor to step down. In his comments Wednesday, he blamed the previous government for failing to act in time as Sri Lanka\u2019s foreign reserves dwindled.<\/p>\n\n\n\n

The foreign currency crisis has crimped imports, creating severe shortages of food, fuel, electricity and other essentials such as medicines, forcing people to stand in long lines to obtain basic needs.<\/p>\n\n\n\n

If steps had at least been taken to slow down the collapse of the economy at the beginning, we would not be facing this difficult situation today. But we lost out on this opportunity. We are now seeing signs of a possible fall to rock bottom,\u201d he said.<\/p>\n\n\n\n

So far, Sri Lanka has been muddling through, mainly supported by US$4-billion in credit lines from neighbouring India. But Mr. Wickremesinghe said India would not be able to keep Sri Lanka afloat for long.<\/p>\n\n\n\n

It also has received pledges of US$300-million-US$600-million from the World Bank to buy medicine and other essential items.<\/p>\n\n\n\n

Sri Lanka has already announced that it is suspending repayment of US$7-billion in foreign debt due this year, pending the outcome of negotiations with the International Monetary Fund on a rescue package. It must pay US$5-billion on average annually until 2026.<\/p>\n\n\n\n

Mr. Wickremesinghe said IMF assistance seems to be the country\u2019s only option now. Officials from the agency are visiting Sri Lanka to discuss a rescue package. A staff-level agreement is likely to be reached by the end of July.<\/p>\n\n\n\n

We have concluded the initial discussions and we have exchanged ideas on various sectors such as public finance, finance, debt sustainability, stability of the banking sector and the social security network,\u201d Mr. Wickremesighe said.<\/p>\n\n\n\n

Representatives of financial and legal advisers to the government on debt restructuring, Lazard and Clifford Chance, are also visiting the island and a team from the U.S. Treasury will arrive next week, he said.<\/p>\n","protected":false},"excerpt":{"rendered":"

KRISHAN FRANCIS COLOMBO, SRI LANKA THE ASSOCIATED PRESS\u00a0 Courtesy The Globe and Mail Sri Lanka\u2019s debt-laden economy has collapsed\u201d after months of shortages of food, fuel and electricity, its Prime Minister told lawmakers Wednesday, in comments underscoring the country\u2019s dire situation as it seeks help from international lenders. Prime Minister Ranil Wickremesinghe told Parliament the […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":true,"template":"","format":"standard","meta":{"footnotes":""},"categories":[6],"tags":[],"class_list":["post-126412","post","type-post","status-publish","format-standard","hentry","category-politics"],"_links":{"self":[{"href":"https:\/\/www.lankaweb.com\/news\/items\/wp-json\/wp\/v2\/posts\/126412","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.lankaweb.com\/news\/items\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.lankaweb.com\/news\/items\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.lankaweb.com\/news\/items\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.lankaweb.com\/news\/items\/wp-json\/wp\/v2\/comments?post=126412"}],"version-history":[{"count":0,"href":"https:\/\/www.lankaweb.com\/news\/items\/wp-json\/wp\/v2\/posts\/126412\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.lankaweb.com\/news\/items\/wp-json\/wp\/v2\/media?parent=126412"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.lankaweb.com\/news\/items\/wp-json\/wp\/v2\/categories?post=126412"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.lankaweb.com\/news\/items\/wp-json\/wp\/v2\/tags?post=126412"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}