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Sri Lanka Economic Crisis Highlights: Govt still in majority, no consensus over replacement for President, PM, says minister

Sri Lanka Crisis Highlights, Cabinet Resignation, President's House Clash Updates: Despite public anger against the Rajapaksa family, President Gotabaya will not resign, Chief Government Whip and Highways Minister Johnston Fernando asserted Wednesday.

By: Express Web Desk | New Delhi |
Updated: April 8, 2022 8:37:55 am
A man rests while waiting in a line to buy diesel near a Ceylon Petroleum Corporation fuel station, amid the country's economic crisis in Colombo, Sri Lanka, April 7, 2022. (Reuters)

Sri Lanka Crisis Highlights: The Sri Lankan Foreign Minister asserted Thursday that the government is still in majority, and there is no consensus over who can replace the President and the Prime Minister, Reuters reported.

Ali Sabry, who quit as Finance Minister just a day after his appointment, urged the government to seek a financial bailout, a debt moratorium, or some other means to address the ongoing crisis. Speaking in Parliament, Sabry Thursday said the government needs to look into restructuring a $1 billion international sovereign bond maturing in July, Reuters reported. Sabry called for political stability in order for the government to hold talks with the World Bank and initiate a bridge-financing plan with the Asian Development Bank (ADB).

Sri Lanka has appointed a three-member advisory group to assist government officials in engaging with the International Monetary Fund (IMF). Meanwhile, India has delivered two fuel consignments to the island nation in the last 24 hours. India supplied 36,000 tonnes of petrol and 40,000 tonnes of diesel, the Indian High Commission in Colombo said, taking the total fuel supplied to Sri Lanka by India to 270,000 tonnes.

Live Blog

Sri Lanka Crisis news: Govt still in majority, no consensus over replacement for President, PM, says Foreign Minister; UN welcomes lifting of Emergency in Sri Lanka; Sri Lanka forms advisory group to assist with IMF talks; Follow latest updates here

22:45 (IST)07 Apr 2022
Lanka appoints advisory panel to help resolve growing debt crisis, engage with IMF

The Sri Lankan government has appointed an advisory committee comprising eminent economic and fiscal experts to provide guidance on addressing the current debt crisis and engaging with the IMF and other lenders as the island nation struggles to combat the unprecedented shortage of foreign reserves. The Presidential Advisory Group on Multilateral Engagement and Debt Sustainability includes Indrajit Coomaraswamy, former governor of the Central Bank of Sri Lanka and former director of the Economic Affairs Division of the Commonwealth Secretariat, according to a statement issued by the President Media Division on Wednesday. --PTI

20:28 (IST)07 Apr 2022
Rajapaksa clan robbed this country (Sri Lanka)': MP Patali Champika

"Rajapaksa clan robbed this country. During their tenure from 2004-2014 they siphoned off USD 19 Bn as per various reports. They got a huge amount of money from international financial markets&now we're in serious problem to repay these loans," says Patali Champika Ranawaka, Sri Lanka MP and ex-minister.

20:15 (IST)07 Apr 2022
Ready to ship rice, drugs to Lankan Tamils: TN to Centre

Chief Minister M K Stalin on Thursday apprised the Centre that Tamil Nadu is ready to ship essential commodities like rice and life saving drugs to Sri Lanka, considering the welfare of Tamils and sought permission for its distribution there through the Indian High Commission.

Stalin spoke over phone to External Affairs Minister S Jaishankar and expressed his deep concern over the plight of Tamils in Lanka, who have been hit hard by the never seen before economic crisis in their country, an official release here said. The chief minister told Jaishankar Tamil Nadu is ready to ship rice, pulses and life saving drugs from Thoothukudi port to Sri Lanka. --PTI

20:08 (IST)07 Apr 2022
Sri Lanka calls for restructure of $1 billion debt and stability

Sri Lanka must look at restructuring a $1 billion sovereign debt due for payment in July, the outgoing finance minister told parliament on Thursday, urging an end to demands for a change in government amid the country's worst economic crisis in decades.

The opposition and some partners of the ruling coalition rejected calls this week for a unity government from President Gotabaya Rajapaksa after he disbanded his cabinet, hoping to quell weeks-long street protests over shortages of fuel, power, food and medicine.

With its foreign exchange reserves shrinking quickly, massive debt payments due and the rupee currency slumping, analysts say the government - controlled by Rajapaksa and his elder brother Mahinda, the prime minister - was running out of options. Reserves dropped 16% to $1.93 billion in March from a month earlier, central bank data showed on Thursday. (Reuters)

18:08 (IST)07 Apr 2022
India ready to continue working with Sri Lanka for rapid post-COVID economic recovery

India stands ready to continue working with Sri Lanka for rapid post-COVID economic recovery, in line with our neighbourhood first policy, MEA spokesperson Arindam Bagchi said on Thursday.

The official further stressed that the relationship between India and Sri Lanka is rooted in shared civilisation values and aspirations of the people and added that the cooperation based on commonality and interest has been strengthened in recent months. 

Speaking on the developing economic crisis in the neighbouring country, the MEA official said India has extended assistance of about USD 2.5 billion during the past 2-3 months, including credit facilities for fuel and food. (ANI)

16:57 (IST)07 Apr 2022
Centre leading country towards Sri Lanka-like ruin: Rajasthan CM

Hitting out at the Centre for its brand of "nationalism", Rajasthan Chief Minister Ashok Gehlot Thursday said that the Union government is taking India on the path of a Sri Lanka-like economic breakdown.

"In Sri Lanka today, people do not have food because there, too, attention was diverted in the name of nationalism and opposition towards minorities. Modi government is trying to take India in the same direction," Gehlot said in a tweet.

16:39 (IST)07 Apr 2022
Sri Lankan shares tumble nearly 4%

Sri Lankan shares closed nearly 4 per cent lower on Thursday, hurt by losses in financials and industrials stocks, as investors awaited the central bank's monetary policy meeting outcome amid the country's worst economic crisis in decades.

At the close of trade, the CSE All-Share index settled 3.86% lower at 8,249.70 points.

The Central Bank of Sri Lanka said it would hold its monetary policy review meeting on Friday, with the review decision to be announced later on the same day after the market closes. (Reuters)

16:38 (IST)07 Apr 2022
Sri Lanka reserves drop 16.1% to $1.93 billion at March-end

Sri Lanka's reserves dropped 16.1% to $1.93 billion in March from a month earlier, the Central Bank said on its website on Thursday, as the country suffers its worst economic crisis in decades. (Reuters)

15:53 (IST)07 Apr 2022
'No medicines, no solutions': Doctors continue protest in Sri Lanka

Chamma Lal Sanjeeva, President, Medical and Civil Rights Professional Association of Doctors, told ANI, "Economic crisis has affected people from the public and private sectors. The fuel crisis has impeded electricity supply and logistics facilities of crucial medical equipment and life-saving medicines."

15:37 (IST)07 Apr 2022
In Photos | Sri Lankans wait in line for fuel amid shortages

As Sri Lanka continues to face its worst economic crisis, people on Thursday waited in lines to get kerosene and fuel amid their shortage.




15:16 (IST)07 Apr 2022
We must have political stability to find solutions to the crisis: Ali Sabry

Ali Sabry, who quit as Finance Minister just a day after his appointment, while speaking in Parliament Thursday said, "We must have political stability to find solutions to the financial crisis."

"We must discuss with the World Bank and we must have a bridge-financing plan with the ADB (Asian Development Bank). If we don’t have stability, who will conduct these talks?," he was quoted as saying by Reuters.

"We must look at how to structure the $1 billion international sovereign bond payment maturing in July. We must go to the IMF, there is no other solution that I can see," Sabry said.

14:27 (IST)07 Apr 2022
Central Bank to hold monetary policy review Friday

Sri Lanka's Central Bank has rescheduled the monetary policy review for Friday.

The bank was originally due to hold its policy meeting last Monday. 

An analyst said the central bank was expected to hike key interest rates by 300-400 basis points (bps) - following a 100 bps increase in early March - to tame inflation that hit 18.7% in March.

"We also expect the newly appointed governor to outline potential measures to be included in the IMF reform plan, views on potential debt restructuring, and currency management," said Lakshini Fernando of Asia Securities, adding she also expected Weerasinghe to address the need for "higher stability and transparency" at the bank. (Reuters)

13:14 (IST)07 Apr 2022
Restructure sovereign bond, seek financial bailout, says outgoing Finance Minister

Ali Sabry, who quit as Finance Minister just a day after his appointment, urged the government to seek a financial bailout, a debt moratorium, or some other means to address the ongoing crisis. Speaking in Parliament, Sabry Thursday said the government needs to look into restructuring a $1 billion international sovereign bond maturing in July, Reuters reported.

Government Medical Officers' Association members walks with placards against the Sri Lanka's President Gotabaya Rajapaksa during a protest near a road leading to the parliament building in Colombo, Sri Lanka, April 6, 2022. (Reuters)
12:07 (IST)07 Apr 2022
Hunt on for Finance Minister as govt struggles to replace Sabry amid crisis

The Sri Lankan government is struggling to replace Ali Sabry who quit as the Finance Minister on Tuesday, a day after his appointment.

A source close to the administration told news agency Reuters that despite appeals to a range of officials and top private sector professionals, the President and his close aides have failed to find a replacement.

12:04 (IST)07 Apr 2022
Indian travel agents' association postpones convention in Colombo

Travel Agents Association of India postponed its 66th Convention which was to be held in Colombo, Sri Lanka from April 19 to 22. 

"The current economic and political situation in the island nation, whereby there is a shortage of fuel, power, gas, the daily consumer needs, along with the political unrest and treason in parts of the country, has compelled us to postpone the convention in Colombo," the Association said in its statement. 

11:43 (IST)07 Apr 2022
Watch | Medical students, doctors protest over shortages of drugs

Doctors and medical students in Sri Lanka came out on the streets Wednesday, protesting against the shortages of drugs in the island nation amid its worsening economic crisis. The doctors demanded that a "health emergency" be declared in the country.

11:18 (IST)07 Apr 2022
Sri Lanka's advisory group to engage with IMF: What is it, who are its members?

The Presidential Advisory Group on Multilateral Engagement and Debt Sustainability includes Indrajit Coomaraswamy, former governor of the Central  Bank of Sri Lanka and former director of the Economic Affairs Division of the Commonwealth Secretariat, according to a statement issued by the President Media Division on Wednesday.

The other members are Shanta Devarajan, Professor of the Practice of Development, Georgetown University and former chief economist of World Bank; and Sharmini Coorey, former director of the Institute of Capacity Development of the IMF Institute, and former deputy director of the Africa Department, IMF.

"Among the responsibilities that the Presidential Advisory Group will undertake are to engage in discussions with relevant Sri Lankan institutions and officials engaging with the IMF, and to provide guidance that will address the present debt crisis and lead towards sustainable and inclusive recovery for Sri Lanka," the statement said. (PTI)

11:01 (IST)07 Apr 2022
Sri Lanka's new Centra Bank chief to hold monetary policy meet on Friday: Report

Sri Lanka's new central bank governor Nandalal Weerasinghe, set to take office on Thursday, will hold a monetary policy meeting the following day, a source with direct knowledge of the matter told Reuters.

"The monetary board meeting will be held on Friday afternoon," said the source, who declined to be identified ahead of the announcement.

The policy is likely to be unveiled the following morning, after which the new governor is expected to lay out his priorities and plans at a news conference, the source added. (Reuters)

10:21 (IST)07 Apr 2022
Sri Lanka's new Central Bank Governor to take office on Thursday: Report

According to sources accessed by news agency Reuters, Sri Lanka's new Central Bank Governor Nandalal Weerasinghe will be taking office on Thursday. 

This came after Ajith Nivard Cabraal announced his resignation, amid the spate of Cabinet Ministers leaving their posts. 

10:09 (IST)07 Apr 2022
Watch | Doctors protest against shortage of drugs in Sri Lanka

Doctors in Sri Lanka came out on the streets Wednesday, protesting against the shortages of drugs in the island nation amid its worsening economic crisis. The doctors demanded that a "health emergency" be declared in the country.

Vasan Ratnasingam, a doctor at Colombo's Lady Ridgeway Hospital for Children, the largest such free-of-charge facility in Sri Lanka with some 2,000 beds, told news agency Reuters that they had run out of at least one vital drug, Digoxin, given for heart conditions. "And other than that, 102 essential drugs are in shortage," the doctor added.

Government Medical Officers' Association members walks with placards against the Sri Lanka's President Gotabaya Rajapaksa after his government lost its majority in the parliament, amid the country's economic crisis, during a protest near a road leading to the parliament building in Colombo, Sri Lanka, April 6, 2022. (REUTERS/Dinuka Liyanawatte)

Government Medical Officers' Association members walks with placards against the Sri Lanka's President Gotabaya Rajapaksa after his government lost its majority in the parliament, amid the country's economic crisis, during a protest near a road leading to the parliament building in Colombo, Sri Lanka, April 6, 2022. (REUTERS/Dinuka Liyanawatte)

The Rajapaksa family, whose members include Sri Lanka’s Prime Minister and President, hails from Hambantota district in the south. President Gotabaya Rajapaksa and his brothers Chamal, PM Mahinda, and Basil are third-generation politicians, while the fourth generation is represented by Mahinda and Chamal’s sons Namal, Yositha and Shashindra.

In South Asia, no other political dynasty has been as confidently nepotistic. During Mahinda Rajapaksa’s second term as President from 2010-15, there were said to be more than 40 Rajapaksa family members in government posts, apart from the cabinet. Many of them faced enquiries for financial fraud after Mahinda’s government was voted out. Basil, who is also a US citizen, was arrested, and his wife and eldest daughter were questioned.

EXPLAINED | The Rajapaksa clan in Sri Lanka politics

For the past week, Sri Lanka has been roiling under violent protests as anger over the government’s handling of the island’s economic crisis boiled over to the streets. Since then, much has happened. President Gotabaya Rajapaksa issued a 36-hour curfew which many protestors defied. He then imposed a national emergency, which was criticised by the public and the Opposition lawmakers, before the President revoked it earlier today.

Critics say the roots of the crisis, the worst in several decades, lie in economic mismanagement by successive governments that created and sustained a twin deficit – a budget shortfall alongside a current account deficit. Foreign exchange reserves have fallen by 70% in the past two years and were down to a paltry $2.31 billion as of February, leaving Sri Lanka struggling to import essentials, including food and fuel.

Here is a look at what is happening in India’s south-eastern neighbour.

READ | Sri Lanka political crisis: Here’s the story so far

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