Sri Lanka is ‘bankrupt’, says PM Nation World News

Sri Lanka is 'bankrupt', says PM  CNN

Colombo, Sri Lanka
Nation World News

Sri Lanka is “bankrupt”, Prime Minister Ranil Wickremesinghe said on Tuesday, as the country grapples with its worst financial crisis in decades, leaving millions struggling to buy food, medicine and fuel.

Wickremesinghe told lawmakers that talks with the International Monetary Fund (IMF) to revive the country’s “collapsed” economy are “difficult”, as the South Asian nation of 22 million has labeled as a bankrupt country rather than a developing country. entered into negotiations.

“We are now participating in the negotiations as a bankrupt country. Therefore, we are faced with a more difficult and complicated situation than in the previous negotiations,” Wickramasinghe said in Parliament.

“Due to the state of bankruptcy of our country, we have to submit a separate plan on our debt stability (IMF),” he said. “Only when they are satisfied with that plan can we reach an agreement at the staff level. It’s not a straightforward process.”

Sri Lanka is in the midst of its worst financial crisis in seven decades, following a record fall in its foreign exchange reserves, with dollar payments for essential imports including food, medicine and fuel.

Schools have been suspended and fuel has been restricted to essential services. In several major cities, including the commercial capital Colombo, hundreds of people queue for hours to buy fuel, sometimes clashing with police and the military as they wait.

On Sunday, Sri Lanka’s Energy Minister Kanchana Wijesekera said the country has less than a day’s worth of fuel left.

“In terms of fuel and food, our country was facing this crisis at some point. There was a lack of fuel. Food prices went up,” he said, adding that international crises such as Russia’s war in Ukraine have made things worse.

“Due to the recent global crises, this situation has become more dire and what we were in the frying pans fell into the oven,” Wijecekera said.

On Tuesday, Prime Minister Wickremesinghe said he expected a report on debt restructuring and stability to be submitted to the IMF by August. Wickremesinghe said a comprehensive credit support program for a period of four years would be drawn up once the agreement is reached.

His speech in parliament was interrupted by opposition lawmakers chanting “Gota go home” – a reference to President Gotabaya Rajapaksa, who was in attendance.

For months, a large number of Sri Lankans have been demanding Rajapaksa’s resignation over allegations of economic mismanagement.

Wickremesinghe said inflation will rise to 60 per cent by the end of this year.

“It will be a difficult and bitter journey,” Wickremesinghe said. “But we can find relief at the end of this journey. Progress can be made.”

The British government said on Tuesday that it is now advising against all essential travel to Sri Lanka due to the impact of the economic crisis.