Conflicts & War

Sri Lanka tries to stabilize government amid debt default

Colombo, May 20 (EFE).- The Sri Lankan government on Friday appointed nine ministers, including those heading the portfolios of trade and health, in an attempt to stabilize the cabinet amid a serious economic, political and social crisis affecting the country, which officially defaulted on its foreign debt this week.

After 26 ministers resigned en-masse in April following massive protests against the economic crisis, which has resulted in the shortage of food, medicines and fuels, the posts have remained vacant except for a few short-term appointments.

The protesters have been demanding the resignation of President Gotabaya Rajapaksa and his brother Mahinda Rajapaksa, who eventually resigned as the prime minister on May 9 after a day of violent clashes between his supporters and the dissidents left 10 people dead and over 300 injured.

On May 12, Ranil Wickremesenghe – the leader of a small opposition faction in the parliament – was appointed as the prime minister, having occupied the post five times in the past.

Soon after, four other ministers – including the foreign and energy portfolios – were announced.

Among the nine ministers nominated on Friday, all eyes would be on the trade and food security minister Nalin Fernando, while other important ministries such as finance and agriculture remain without a boss amid the crisis.

On Thursday night, Wickremesinghe said in a social media post that the United States had predicted a worldwide foot shortage and identified Sri Lanka and Afghanistan as two countries that could be seriously affected.

He also lamented the lack of time to obtain sufficient fertilizers for the current crop.

The Rajapaksa-family led government had come under severe criticism for unilateral measures that aggravated the crisis, such as banning the use of fertilizers in a push for organic agriculture.

The prime minister appealed all countries to nominate a united national assembly to help tackle the national problems.

Political analyst and former government advisor Aruna Kulatunga told EFE that “it is too early to say if this cabinet will pull together.”

“However, it is interesting to note that most of the members of this cabinet have worked with Prime Minister Wickremesinghe in his long parliamentary career,: he added.

Wickremesinghe on Friday also welcomed the announcement by the G7 that it would help Sri Lanka by tweeting that “the continued engagement by the international community with Sri Lanka is key to overcoming the economic crisis,” after acknowledging in the parliament on Wednesday that the island did not “even have a million dollars” in its coffers.

This week Sri Lanka officially entered into a “preventive default” of its debt, the governor of the Central Bank of Sri Lanka P Nandalal Weerasinghe confirmed on Thursday, after the expiry of a 30-day grace period which it had been granted last month for certain payments.

As per finance ministry data, Sri Lanka’s foreign debt by the end of 2021 amounted to 102.8 percent of its GDP, at around $54 billion, out of which $20 billion is in foreign debt.

In order to handle the payments to restructure the debt, Sri Lankan authorities are in discussion with organizations such as the International Monetary Fund, from which Colombo expects to secure a $4 billion loan to overcome the current economic crisis. EFE


Related Articles

Back to top button