COLO: Sri Lanka’s debt-laden economy has “collapsed” after months of shortages of food, fuel and electricity, its prime minister told lawmakers on Wednesday, in comments underscoring the country’s dire situation as it seeks help from international lenders.
PM Ranil Wickremesinghe told the parliament that the country is “facing a far more serious situation beyond the mere shortages of fuel, gas, electricity and food. Our economy has completely collapsed.” While Sri Lanka’s crisis is considered its worst in recent memory, Wickremesinghe’s assertion that the economy has collapsed did not cite any specific new developments. It appeared intended to emphasise to his critics that he has inherited a difficult task.
Lawmakers of two main opposition parties are boycotting parliament this week to protest against Wickremesinghe, who became PM just over a month ago and is also finance minister, for not having delivered on his pledges to turn the economy around. Wickremesinghe said Sri Lanka is unable to purchase imported fuel, even for cash, due to heavy debt owed by its petroleum corporation. “Ceylon Petroleum Corporation is $700 million in debt. As a result, no country or organisation in the world is willing to provide fuel to us.” He blamed the previous regime for failing to act as foreign reserves dwindled.
So far, Sri Lanka has been muddling through, mainly supported by $4 billion in credit lines from India. But Wickremesinghe said India would not be able to keep Sri Lanka afloat for long. He said IMF assistance seems to be the country’s only option now.