Clergy in ‘bankrupt’ Sri Lanka call for President and PM to resign

It is difficult to imagine just how difficult life has become for ordinary Sri Lankans today, as they struggle to buy from rapidly depleting stocks of food, fuel and medicine, and with swiftly diminishing hope or reserves of money to buy more.

Sri Lanka is "bankrupt," Prime Minister Ranil Wickremesinghe declared as the Indian Ocean island nation, 75 years after it became free, defaulted on its debt repayment and finds itself in the throes of a crippling economic crisis, with little hope for improvement in the near future.

In cities, including the capital Colombo, hundreds of anxious people continue to line up for hours to buy fuel, occasionally clashing with police and the military while they wait. Schools have been suspended for over three weeks and almost non-existent fuel has been limited to absolutely essential services.

Brought in as a compromise candidate to try and tackle the crisis, Wickremesinghe and officials have been grappling to work out an economic reforms package that would convince the IMF to provide a loan to bail the country out of its immediate crisis, where there is no foreign exchange to import either fuel or food supplies. The IMF team just spent 10 days in the country but the crisis remains unresolved as it has yet to work out the logistics of how to provide what quantum of aid to a bankrupt nation.

“In the past, we have held discussions as a developing country,” Wickremesinghe said. “But now the situation is different. We are now participating in the negotiations as a bankrupt country. Therefore, we have to face a more difficult and complicated situation.”

While many of Sri Lanka’s problems have been self-inflicted and can largely be blamed on financial mismanagement, particularly by the Rajapaksas, the Covid pandemic wrought havoc on the country’s tourism sector, which has been a major foreign exchange earner. And now, the war in Ukraine, which has created havoc with global food supplies, has hastened the crisis. With soaring energy and food prices, disruptions in the supply chain and countries, including India, suddenly safe-guarding their own food stocks zealously, Sri Lanka’s very limited foreign exchange is bringing in less and less, compounding the entire crisis of scarcity. In a recent interview, Wickremesinghe blamed the war in Ukraine as a critical factor in the continued rapid contraction of the Sri Lankan economy.

India appears to have emerged as the only country staunchly standing by Sri Lanka and, after already providing over 3.5 billion dollars in assistance, through currency swap arrangements and soft loans and grants for fuel and food, since the beginning of 2022. Two ships of diesel and two ships of petrol will be delivered from India in July as a solution to Sri Lanka’s fuel crisis, as the governments of both countries finalise the logistics to transport these tankers soon.

This is despite a recent outpouring of public anger over some laws being amended to hand some infrastructure and energy projects to the Adani group, considered close to India’s ruling establishment.

Even Japan has reportedly refused to provide aid to Sri Lanka at this juncture, with Mizukoshi Hideaki, the Japanese Ambassador to the country reportedly saying that there is a risk of financial assistance to Sri Lanka being mismanaged. China, once played by the Rajapaksas to snub India, has only talked of the need to assist the country, but has not walked the talk. Sri Lanka was among the earliest to join China’s maritime silk route but, after several Chinese projects initiated by the Rajapaksas, including the lease of the Hambantota port, proved to have devastating economic consequences, Beijing appears to have lost its lustre.

For months, large numbers of Sri Lankans have called for President Gotabaya Rajapaksa, widely viewed as responsible for the current crisis, to resign over the acute economic mismanagement which has brought the country to its knees. While Rajapaksa remains in office, the Sri Lankan Parliament plans to move to drastically curb the powers of the executive presidency, brought in by the current President’s elder brother, Mahinda Rajapaksa, after the armed insurgency led by the Liberation Tigers of Tamil Eelam (LTTE) was militarily defeated in 2009.

The government in Colombo has resorted to making desperate appeals to its citizens to ameliorate the situation, including an offer to its public sector staff (around one and a half million people) to take five years’ unpaid leave to find employment abroad and send back precious remittances to revive the economy. It has introduced a scheme to give government employees an extra day off weekly, to grow their own crops for food. Queues to get passports and queues for visas at embassies have been growing along with the long lines for fuel and food supplies.

(The writer is an independent commentator in international affairs)