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Sri Lanka PM says economy ‘has collapsed,’ unable to buy oil
By KRISHAN FRANCIS
today
COLOMBO, Sri Lanka (AP) — Sri Lanka’s debt-laden economy has “collapsed” after months of shortages of food, fuel and electricity, its prime minister told lawmakers Wednesday, in comments underscoring the country’s dire situation as it seeks help from international lenders.
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.”
While Sri Lanka’s crisis is considered its worst in recent memory, Wickremesinghe’s 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’t be fixed quickly, as the economy founders under the weight of heavy debts, lost tourism revenue and other impacts from the pandemic, as well as surging costs for commodities.
Lawmakers of the country’s two main opposition parties are boycotting Parliament this week to protest against 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.
They expected him to turn the economy around in a month?
Wickremesinghe said Sri Lanka is unable to purchase imported fuel, even for cash, due to heavy debt owed by its petroleum corporation.
“Currently, the Ceylon Petroleum Corporation is $700 million in debt,” 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.”
Wickremesinghe took office after days of violent protests over the country’s 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’s foreign reserves dwindled.
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.
“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,” he said.
So far, Sri Lanka has been muddling through, mainly supported by $4 billion in credit lines from neighboring India. But Wickremesinghe said India would not be able to keep Sri Lanka afloat for long.
It also has received pledges of $300 million-$600 million from the World Bank to buy medicine and other essential items.
Sri Lanka has already announced that it is suspending repayment of $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 $5 billion on average annually until 2026.
Wickremesinghe said IMF assistance seems to be the country’s 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.
“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,” Wickremesighe said.
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.
Sri Lankans return to cooking with firewood as economy burns
Switch began at the beginning of the year when 1,000 kitchens exploded across the country
Published: July 06, 2022 15:39
AFP
In this picture taken on March 15, 2022, a man uses firewood to cook food at a hotel in Colombo.
Image Credit: AFP
Nehinna: As once relatively wealthy Sri Lanka suffers a dire economic crisis with shortages of everything from medicines to gas, people are returning to cooking with firewood.
The switch began at the beginning of the year when more than 1,000 kitchens exploded across the country, killing at least seven people and injuring hundreds more.
The reason was suppliers looking to cut costs and increasing the proportion of propane, which raised the pressure to dangerous levels.
But now, along with much else in the country of 22 million people, gas is either unavailable or too expensive for most.
Some tried to shift to kerosene oil cookers, but the government did not have dollars to import it along with petrol and diesel, which are also in short supply.
And those who bought electric cookers were in for a rude shock when the government imposed lengthy power blackouts as it ran out of dollars to import fuel for generators.
Niluka Hapuarachchi, 41, was miraculously unharmed when her gas range exploded soon after cooking Sunday lunch in August.
“Fortunately, no one was there at the time. There were pieces of glass all over the floor. The glass-top stove had exploded. I will never use gas for cooking. It is not safe. We are now on firewood,” she said, despite moves to address the propane problem.
Roadside eatery owner M.G. Karunawathi, 67, also switched to wood and said it was a choice between closing her business or putting up with smoke and soot.
“We suffer (smoke inhalation) when cooking with firewood, but we have no choice,” Karunawathi told AFP. “It is also difficult to find firewood and it is also becoming very expensive.”
Nehinna, Sri Lanka
Lanka PM House Set On Fire, President To Resign On Wednesday:
10 Facts
Sri Lanka crisis: The development comes shortly after Lankan Prime Minister Ranil Wickremesinghe's house in Colombo was today set on fire by protesters.
World NDTV News Desk
Updated: July 09, 2022 10:35 pm IST
Lanka crisis: PM Ranil Wickremesinghe has announced that he will resign from his post
Sri Lanka President Gotabaya Rajapaksa will resign next Wednesday, after months of protest against him amid an unprecedented economic crisis. The Speaker will become the President for 30 days during which Parliament will elected a new leader.
Here are the top points in this big story:
The development comes shortly after Lankan Prime Minister Ranil Wickremesinghe's house in Colombo was today set on fire by protesters. "Protesters have broken into the private residence of Prime Minister Ranil Wickremesinghe and have set it on fire," said the Lankan Prime Minister's Office in a statement.
Despite tear gas being fired on the protesters to disperse, they entered the Prime Minister's house. The protesters were seen damaging vehicles belonging to the Prime Minister.
Mr Wickremesinghe, who was appointed as Prime Minister in May, has announced that he will resign from his post in order to ensure the continuation of the government and the safety of all the citizens.
"To ensure the continuation of the Government including the safety of all citizens I accept the best recommendation of the Party Leaders today, to make way for an All-Party Government. To facilitate this I will resign as Prime Minister," he tweeted after the meeting.
Former cricket captains Sanath Jayasuriya and Mahela Jayawardena condemned the violence and appealed for calm.
Earlier in the day, President Gotabaya Rajapaksa fled his official residence shortly before protesters overran the compound and stormed his nearby office. Amid chaos, videos emerged of suitcases being loaded on a Sri Lanka Navy ship. Local media claims that the suitcases were of President Rajapaksa.
After breaching the gates of the presidential palace, hundreds of people could be seen in live broadcasts on social media walking through its rooms, with some among the boisterous crowd jumping into the compound's pool.
The nation of 22 million people is struggling under a severe foreign exchange shortage that has limited essential imports of fuel, food and medicine, plunging it into the worst financial turmoil in seven decades.
Many blame the country's decline on President Gotabaya Rajapaksa. Largely peaceful protests since March have demanded his resignation.
Discontent has worsened in recent weeks as the cash-strapped country stopped receiving fuel shipments, forcing school closures and rationing of petrol and diesel for essential services.
Today, enormous crowds invaded Sri Lanka's Parliament Building.
This spectacular demise of a once prosperous nation can be blamed partly on probable corruption, partly on Covid-19, and partly on Deep State's proxy war against Russia in Ukraine. It's another example of Deep State's willingness to suffer national disasters and negative climate impacts in order to keep the war inventories moving.
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