9/5/2022
In May, Sri Lanka defaulted on sovereign debt payments amounting to $78 million. The only way out of the economic crisis is to obtain a bailout from the International Monetary Fund and set long-term economic recovery plans.
The ongoing political crisis, which commenced with protests against Gotabhaya Rajapaksa, the former president, and Mahinda Rajapaksa, the former prime minister, are far from over.
The main question now is whether Ranil Wickremasinghe, the current president, will be able to bring both economic and political stability to the country.
However, to bring about economic stability, the country must be in safe hands with capable leaders and a legitimate government.
Due to mounting pressures and the undying momentum of protests themed as #gotagohome, both Mahinda Rajapaksa and Gotabhaya Rajapaksa resigned from their respective offices.
It was a pandemonium that resulted in protesters storming the Presidential Palace, and the Prime Minister’s office, and setting fire to the homes of politicians. Even the ancestral home of the Rajapaksas’ in Hambantota and the private residence of Ranil Wickremesinghe was set ablaze.
Unfortunately, questions were raised about Wickremasinghe’s legitimacy to rid the country of corruption when he was implicated in an insider trading scam involving the country’s central bank in 2016 run by the son-in-law of Arjun Mahendran, the former central bank governor, who was appointed due to the personal recommendation of Ranil Wickremasinghe.
Sri Lanka’s ambassador to China has announced that a $4 billion aid package is under discussion which includes $1.5 billion in a credit line and a currency swap. India has already provided assistance worth $4 billion.
Nevertheless, more work has to be done with regard to stabilising the currency, and strengthening foreign reserves to boost investor confidence, while also taking drastic steps to privatise loss-making state-owned enterprises which have been a burden on the economy.
The problems facing Sri Lanka are far from over as the country awaits pragmatic solutions from capable leaders with hopes there will be a silver lining in the clouds.
© CopyRights RawNews1st
- Make sure you like us on Facebook https://www.facebook.com/RawNews1st/
