Prime Minister said, the economy collapsed
Sri Lankan Prime Minister Ranil Wickremesinghe has kept the country’s finance ministry with himself and the responsibility of handling the country’s economy rests on his shoulders, which is burdened with huge debt, lost tourism revenue and other impacts from the pandemic and rising costs for commodities. But from the statement he has given in Parliament, it seems that Prime Minister Wickremesinghe is now giving up. Addressing the country’s Parliament, the Sri Lankan Prime Minister said that, ‘Currently, Ceylon Petroleum Corporation has a debt of $700 million’. He told the MPs that, as a result, no country or organization in the world is ready to provide us with fuel. And they are shying away from providing fuel even after taking money.
‘Failed to handle the situation’
Sri Lankan Prime Minister Ranil Wickremesinghe said the government had failed to act in time to reverse the situation, as Sri Lanka’s foreign reserves were depleted. He said, ‘If steps had been taken to slow the collapse of the economy at least initially, we would not be facing this difficult situation today. But we missed this opportunity. We are now seeing signs of a possible downtrend to rock bottom’. Sri Lanka is mainly backed by credit lines worth $4 billion from neighboring India. But Mr. Wickremesinghe said that India would not be able to keep Sri Lanka for very long.
Sri Lanka suspended loan repayments
Sri Lanka has already announced that it is suspending the repayment of foreign debt of $7 billion due for repayment this year. At the same time, the government of Sri Lanka is in talks with the International Monetary Fund to save the country from the economic crisis, but the talks are pending midway. Sri Lanka will have to pay an average of $5 billion annually until 2026. The foreign exchange crisis has led to huge shortages forcing people to stand in long lines to buy essential items including fuel, cooking and medicine.
Why has Sri Lanka’s economy collapsed?
The UN World Food Program says that nine out of 10 families in Sri Lanka have to skip their meals for the day, or they are eating less to save food, so that they do not have problems in the future. At the same time, three million people of Sri Lanka are receiving humanitarian aid. Let us tell you that Ranil Wickremesinghe took over as the Prime Minister of Sri Lanka only last month and Mahinda Rajapaksa, who was the Prime Minister before him, is accused of sinking the country’s economy and he took a huge loan from China and then the country’s economy continued to sink. .
How serious is the Sri Lankan crisis?
Petrol pumps in Sri Lanka have several kilometer long lines and two days ago a truck driver died in Sri Lanka after standing in line for five days. At the same time, Sri Lankans have stopped getting gas cylinders and now people have started cooking on wood. At the same time, doctors have taken to social media to get vital supplies of equipment and medicine. An increasing number of Sri Lankans are asking for a passport to go abroad in search of work. Government employees have been given additional days off for three months to give them time to grow their own food. In short, people are suffering and desperate for things to improve. But, it seems, the government has raised its hands.
Why did the Prime Minister say, the economy has collapsed
Such a harsh announcement about the state of the economy of the Sri Lankan Prime Minister can undermine one’s faith. Wickremesinghe appears to be underscoring the challenge to his government of seeking help from the IMF and facing criticism over the lack of reform since he took office only last month. He is also trying to remove criticism from within the country. The purpose of his remarks may be to try to buy more time and support so that he can take drastic steps to revive the country’s economy.
Foreign exchange reserves of only $ 25 million
The Sri Lankan Finance Ministry says that Sri Lanka has only $ 25 million in usable foreign reserves and with this money it can neither import oil nor pay off billions in debt. Meanwhile, the Sri Lankan rupee has depreciated by almost 80% and the value of the Sri Lankan currency has now become 360 against a dollar. Therefore, buying goods for Sri Lanka has become even more expensive. Sri Lanka has to pay a debt of US $ 25 billion by the year 2026 and this year Sri Lanka has to pay the debt of $ 7 billion, which Sri Lanka has refused to pay.