COLOMBO: President Ranil Wickremesinghe has pushed for an all-party government to resolve Sri Lanka’s worst economic crisis in memory, as the new leader expects an agreement with the International Monetary Fund to be delayed after unrest over the past weeks.
The island nation of 22 million people, struggling with daily power cuts and shortages of essential goods such as fuel, food and medicines, saw anti-government protests that began in March spread across the country and culminate in the resignation of former president, Gotabaya Rajapaksa, in early July.
Wickremesinghe was elected by parliament on July 20 to complete the five-year term of Rajapaksa, who fled to Singapore after demonstrators stormed his official residence and occupied several key government buildings in protests over economic hardship.
“The best way to solve the problems of the country is through an all-party government,” Wickremesinghe said during a meeting on Saturday with the influential monks of the Temple of the Tooth in Kandy, one of Buddhism’s most sacred shrines.
He had invited members of parliament to join discussions for a unity government just a day earlier, he said, as assistance from the IMF alone will not be enough for the debt-laden country.
Sri Lanka defaulted on its $51 billion foreign debt payments in April due to a severe lack of foreign currency, which led to a shortage of critical imports that have persisted in the country.
The South Asian country has held discussions with the IMF for a bailout, but reaching a staff-level agreement that would be key for that has been pushed back due to the turmoil of recent weeks, the president said.
“Nothing happened since July 9 until now. Now it has been delayed until the end of August and we are expecting to get it approved by September only,” Wickremesinghe said.
The IMF’s rescue package would not be enough to pull the country out from the crisis, he said.
“Just because we take money from the IMF, do not think that all problems will be solved. Our debts have increased. How will we pay these debts?”
“We need more foreign exchange and need new ways to bring in forex to the country.”
Murtaza Jafferjee, economist and chairman of the Colombo-based think tank Advocata Institute, told Arab News on Sunday that an all-party government would help to reach the political consensus needed to carry out the necessary reforms in Sri Lanka.
“Furthermore, the more competent MPs who can help with the economy are with the SJB, thus he wants them to come over,” Jafferjee said, referring to the main opposition Samagi Jana Balawegaya.
Reviving the country’s once-thriving tourism industry would be key, Jafferjee said, as travelers bringing in dollars would help to reduce shortages in the island nation.
“The sector that can have the fastest rebound is tourism, but the bad publicity is not helping our cause,” he said.
Tourism was a key source of Sri Lanka’s foreign exchange reserves.
In 2019, the South Asian country welcomed more than 1.9 million tourists. As COVID-19 restrictions upended the hospitality industry, the number dropped to less than 200,000 last year. But activity is slowly picking up again, as 380,000 tourists have arrived in the country in the first half of 2022, according to the Sri Lanka Tourism Development Authority.
The upcoming winter season for countries in the northern hemisphere is usually the peak season for Sri Lanka’s tourism.
“So one hopes that there will be a retraction of the travel warnings that will make people more comfortable with travel to the country,” Jafferjee said.