Colombo: Sri Lanka was going to have to brace itself for worse, Ranil Wickremesinghe warned the crisis-hit island nation Monday, four days after he took over as Prime Minister. In his first address to the nation in his present tenure, the new PM laid bare that the economy was in a “precarious position”, 15-hour power cuts were a possibility, and that the country only had “petrol stocks for a single day”.
The next few days are going to be the “most difficult of our lives,” Wickremesinghe warned, and that “we must prepare ourselves to make some sacrifices”.
In the speech, which was also a day before Parliament convenes, the PM urged that a national body “with the participation of all political parties” must be formed to “find solutions for the present crisis.” He also stated that he had taken on a dangerous challenge, but was willing to risk his life if needed. “My goal and dedication [are] not to save an individual, a family, or a party. My objective is to save all the people of this country and the future of our younger generation,” he added.
Bhavani Fonseka, a senior researcher from the Colombo-based policy think tank Centre for Policy Alternatives, said this was the first time that a political leader had admitted that things were bad.
“We’re getting more information than we got before. The previous government whitewashed things,” she told ThePrint after the speech. “This is the first time that a political leader has come out and admitted that things are dire.”
In the PM’s chair for his fifth tenure, Wickremesinghe takes over at a time when, hit hard by the pandemic, rising oil prices, and populist tax cuts, Sri Lanka is in the midst of a crisis unparalleled since its independence in 1948.
A chronic foreign exchange shortage has led to rampant inflation, a massive power crisis, and shortages of medicine, fuel and other essentials, bringing thousands out on the streets in protest against President Gotabaya Rajapaksa and his family, including his older brother Mahinda, the controversial former prime minister of the country. The protests, which were largely peaceful, took a violent turn last week after Mahinda’s supporters stormed an anti-government protest camp in Columbo and clashed with police and protesters.
The protests led the President to replace Mahinda Rajapaksa with Ranil Wickremesinghe in a desperate attempt to placate protesters.
‘Extremely precarious’ economy, fuel stocks ‘for one day’
Not mincing his words, Wickremesinghe told the nation that the Sri Lankan economy was “extremely precarious” and that the treasury would find it a challenge to find even USD 1 million in foreign exchange, which were down from USD 7.5 billion in November 2019.
Power outages could go up to 15 hours, he warned, but promised that the government had got the money to tide over that crisis.
There was an urgent need to get USD 20 million to provide gas to consumers, he said. “The situation of kerosene and furnace oil is even more urgent,” he said.
He also admitted that the country had only enough petrol stocks for one day.
“The Ministry of Finance is finding it difficult to raise USD 5 million required to import gas. To ease the queues, we must obtain approximately USD 75 million within the next couple of days.” he said.
Wickremesinghe said in his address that Sri Lanka was going to get assistance from “foreign allies”.
“For a short period, our future will be even more difficult than the tough times that we’ve just passed. We will face considerable challenges and adversity,” he said. “This won’t last long. In the coming months, our foreign allies will assist us. They have already pledged their support. Therefore, we will have to patiently bear the next couple of months.”
Fonseka said Sri Lanka was looking forward to assistance from India, Japan, tthe Asian Development Bank, and World Bank to help meet its basic necessities.
“While the government is looking to get the economy fixed, they’re looking at some form of bridge financing since the International Monetary Fund’s money isn’t coming any time soon,” she said. “Ranil Wickremesinghe is seen as someone with experience and can negotiate with the international community.”
Medicines in short supply
Political analysts in Colombo say the country’s most vulnerable communities will be hit the hardest. The country already faces an acute shortage of life-saving drugs and medical supplies — a fact that the Prime Minister addressed in his Monday speech. He said Sri Lanka owed its suppliers SLR 34 billion for medical supplies and food for patients.
“Another grave concern is the lack of medicine. There is a severe shortage of a number of medicines, including medicine required for heart disease as well as surgical equipment,” Wickremesinghe said. “Payments have not been made for four months to suppliers of medicine, medical equipment, and food for patients.”
The country is particularly short of two life-saving drugs, Wickermesinghe said: “Unfortunately, our Medical Supplies Division is unable to provide even two critical items of the 14 essential medicines that we currently need. These two are a medicine used in treating heart disease and the anti-rabies vaccine. The latter has no alternative treatment.”
Paikiasothy Saravanamuttu, the executive director of the Centre for Policy Alternatives, said the Sri Lanka government’s negotiations with the International Monetary Fund should lead to a targeted cash transfer system that will first benefit the country’s poorest populations.
“At the moment, Sri Lanka will accept aid from anyone, since we are literally going around with a begging bowl,” he said.
Wickremesinghe said in his speech that his government was expecting two diesel shipments under the Indian credit line — on 18 May and 1 June.
“As you are already aware, our US dollar reserves are low. However, we succeeded in bringing in a diesel shipment Sunday despite these adverse circumstances with Indian assistance,” he said.
Saravanamuttu said that Sri Lanka had a complicated relationship with India.
“It’s a love-hate relationship but we know India will always be there. India is a country that won’t let us go under,” he said.
On China’s role, Saravanamuttu said: “China has taken a step back and has not restructured the debt as yet. It wasn’t so long ago that China was seen as our best friend”.
(Edited by Uttara Ramaswamy)