Sri Lanka faces complete economic collapse: Premier

FILE: 2022 Sri Lankan economic crisis, people wait for long time to refill liquefied petroleum gas cylinders (Photo By AntanO – Own work/Wikimedia Commons, CC BY-SA 4.0)

ISTANBUL — The Sri Lankan prime minister on Wednesday warned that the economy of the island nation is facing a “complete collapse.”

Addressing the country’s parliament, Ranil Wickremesinghe said: “Our economy has faced a complete collapse,” adding that shoring up foreign reserves is the route to financial recovery.

“That is the most serious issue before us today. These issues can only be resolved by reviving the Sri Lankan economy. In order to do this, we must first resolve the foreign reserves crisis,” said the premier, according to a transcription of his speech delivered in the native Sinhalese language.

In April, the country announced that it had defaulted on all of its foreign debt as the island nation grappled with massive anti-government protests amid its worst economic crisis.

In mid-May, the country stated that crisis-hit Sri Lanka had run out of petrol. A tourist-rich nation, Sri Lanka saw foreign reserves dry up since the Covid-19 pandemic closed all travel and remittances going into the country.

The financial crisis resulted in the resignation of Wickremesinghe’s predecessor Mahinda Rajapaksa after violent protests.

Wickremesinghe had earlier this month said the country needs USD5 billion for essential needs such as food, fuel, fertilizer, and gas over the next six months.

“Every two weeks since taking the reins of this government, I have taken steps to inform you of the real situation faced by the country and the measures we are taking to address it,” Wickremesinghe told the parliament.

Urging united efforts to lead Sri Lanka, home to around 22 million people, Wickremesinghe said: “It is no easy task to revive a country with a completely collapsed economy, especially one that is dangerously low on foreign reserves.”

“We are seeing signs of a possible fall into the very bottom,” the prime minister said, adding the “only safe option is to hold discussions with the International Monetary Fund.”