A veteran politician is taking control of Sri Lanka’s struggling economy

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Former Sri Lankan Prime Minister Ranil Wickremesinghe has been sworn in as the country’s president and promised to form a multi-party government capable of securing a multi-billion dollar bailout from the International Monetary Fund.

Wickremesinghe’s victory follows the resignation of President Gotobaya Rajapaksa, who fled to Singapore after hundreds of thousands of Sri Lankans marched through the capital on July 9, stormed the presidential palace, picnicked on the lawns and even swam in the presidential pool.

However, Wickremesinghe is also unpopular with many protesters given his close ties to the Rajapaskas. He served as prime minister under Gotabaya and despite promises that he would form a multi-party government, most of his appointments to the new cabinet were chosen from among the ranks of Rajapaksa loyalists.

The Rajapaksa family ruled for 17 years and are widely blamed for bankrupting this country, with debts totaling $51 billion and foreign exchange reserves of just $1.7 billion. The central bank says it needs $7 billion for its debt obligations and to support Sri Lanka for the rest of this year.

Ganeshan Wignarjara, a senior fellow at the Institute of South Asian Studies at the National University of Singapore, said the crisis was predicted at least four years ago, but the Rajapaksas wouldn’t listen and the first approaches from the IMF in April had come much too late.

In this photo provided by the Sri Lankan President’s Office, Sri Lanka’s newly elected President Ranil Wickremesinghe signs after being sworn in during his swearing-in ceremony in Colombo, Sri Lanka, July 21, 2022.

“The Sri Lankan economy is in danger of collapsing after defaulting on its debt. Growth is -4 to -6% in 2022 and inflation is between 50 and 70% this year and three quarters ago millions of poor who have been created by this crisis.

“So it’s a terrible situation in Sri Lanka,” he said, adding that Wickremesinghe needed time to put his country’s finances in order.

Officials from Colombo are due to meet the IMF in August and talks are expected to include Sri Lanka’s three main lenders – Japan, the Asian Development Bank and China.

At the recent meeting of G-20 finance officials in Indonesia, US Treasury Secretary Janet Yellen urged China to help restructure Sri Lanka’s debt, telling reporters: “Sri Lanka is clearly unable to repay this debt.

“And I hope China will be willing to work with Sri Lanka to restructure the debt – that would probably be in both China’s and Sri Lanka’s interests,” she said.

Wignaraja also said China must play a positive role in resolving the crisis, but added that fears of a Chinese debt trap had been exaggerated as Beijing only holds 14% of Sri Lanka’s total debt. .

“China has given Sri Lanka $13.2 billion since 2006 for infrastructure projects. These projects have had mixed results; good projects, bad projects.

“The total debt burden is approximately $7.6 billion. This suggests growing debt to China but does not indicate that Sri Lanka is still in a Chinese debt trap,” he said.

Any deal with the IMF could take months and Sri Lankans still have to contend with hyperinflation, acute food and fuel shortages and power outages. Schools remain closed and many people are working from home.

Drug shortages have prompted doctors to warn people they will die, especially in remote countryside, where distribution of essential items including rice has come to a halt as the country runs out of fuel.

Protesters and politicians from all political parties are also demanding an independent investigation into the Rajapaksa family, their wealth and their allegations of corruption.

Sri Lankan investigators have previously claimed that more than $2 billion was transferred to bank accounts in Dubai held by relatives of Mahinda Rajapaksa, brother of Gotabaya, when he was president more than seven years ago . Mahinda dismissed these claims as “nonsense”.

Health workers hold signs and shout slogans against Sri Lankan President Ranil Wickremesinghe during a protest in Colombo on July 23, 2022.

Health workers hold signs and shout slogans against Sri Lankan President Ranil Wickremesinghe during a protest in Colombo on July 23, 2022.

The number of protesters has dwindled since Rajapaksa fled the country, but resentment towards the government remains high, with many protesters deeply skeptical and trying to keep their tent camp outside the presidential compound. However, the army and police began dismantling the force camp on Friday morning, prompting clashes and arrests.

“Our government, the Sri Lankan government, is killing innocent people in the rural areas of this country. They have nothing to eat,” said Keith Gibson, musician and protest leader.

“They’re just drinking water – and this corrupt regiment, they’re killing the people and they’re not ruling, and they don’t have a solution for the country, you know, and the people are suffering,” he said. -he declares.

His sentiments were echoed by Sulaimaan Saim, a medical student who has just returned from studying in Belarus. He said people who once drove luxury vehicles now ride tuk-tuks, and people who once rode tuk-tuks are now forced to walk.

“The government has screwed up too much. They played with our money. They took people’s money. They basically stole it,” he said.

“Now we are at zero, nothing, completely nothing, we have nothing, our country is really messed up. We have no fuel, we have no food, we have no gas. “We don’t have medicine. People are dying. Waiting in queues for fuel for four or five days is really bad,” he said.

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