Colombo, Sri Lanka ( Associated Press) — Sri Lanka’s new Prime Minister Ranil Wickremesinghe has been sworn in as finance minister as this Indian Ocean island nation faces its worst economic crisis in memory.
President Gotabaya Rajapaksa named Wickremesinghe minister for finance, economic stability and national policies in an apparent bid to gain Sri Lanka’s credibility as the government negotiates a bailout package with the International Monetary Fund.
Sri Lankans are facing shortage of food and fuel, lack of electricity and other shortages. The country lacks the financial means to buy imported necessities and pay off its debt, and the economic crisis has fueled political turmoil, with protesters demanding Rajapaksa’s resignation.
Wickremesinghe’s appointment came after a government announcement that Sri Lanka was hiring two international firms to restructure its $51 billion foreign debt. France’s Lazard will provide financial advice and Clifford Chance LLP will provide legal assistance to international creditors in restructuring Sri Lanka’s debts.
Wickremesinghe, a five-time former prime minister who was appointed to the post two weeks ago by his predecessor Mahinda Rajapaksa – who is the president’s elder brother – resigned following violent attacks by his supporters on peaceful anti-government protesters.
Sri Lankans have been forced to stand in long lines for months to buy scarce essentials, with many returning home empty-handed. From food, cooking gas, medicine and fuel to toilet paper and match sticks, there is an acute shortage of many items.
The economy has suffered from the pandemic, which has kept tourists away, and rising costs for most imports.
Almost bankrupt, the country and has suspended repayments of $7 billion in foreign debt due this year. The IMF has said that any short- or long-term assistance will depend on negotiations with creditors on debt restructuring. Sri Lanka will have to pay off foreign debt of about $ 25 billion by 2026.
The finance ministry said earlier this month that the country’s usable foreign reserves had come down to $25 million.
Wickremesinghe, 73, has been in Parliament for 45 years. His political party split in 2020 amid a leadership crisis, and its senior-most members went on to form a new party, which is currently the country’s main opposition.
He said last week that petrol stocks had fallen in a day, but shipments of gasoline paid for by an Indian credit line started arriving over the weekend.
Protesters have been occupying the entrance of the President’s office for more than 40 days, demanding Rajapaksa’s resignation.
Government supporters’ attacks on peaceful protesters sparked nationwide riots in which nine people, including a legislator, were killed and 200 were injured. Houses and properties of government ministers and their supporters were burnt. Violence has almost wiped out the Rajapaksa dynasty after Mahinda Rajapaksa resigned as prime minister.
Wickremesinghe is working on a constitutional amendment to reduce the President’s powers and better empower Parliament, apart from reviving the economy.