Sri Lanka’s hardships to persist till end of year, says President Ranil Wickremesinghe

‘India has given us a breath of life,’ says Sri Lankan President in inaugural parliament address

Sri Lanka’s President Ranil Wickremesinghe delivers his inaugural speech in Parliament on Wednesday, about a fortnight after his unexpcted election to the top office.

Sri Lanka is in great danger and citizens’ hardships will persist till the end of the year, President Ranil Wickremesinghe told Parliament on Wednesday, while yet again seeking support from opposition parties that are reluctant to join his government.

“We are in great danger. The country could extricate and be secured from that danger only if we all face this challenge together as one people. It is vital that the honourable members of this Parliament as well as the entire populace contribute with their own strength towards the effort of nation building,” he said, in his first address to the House since being elected President on July 20.

The six-time Premier rose to the country’s highest office amid an unprecedented economic crisis that set off political turbulence, as mass protests ousted the Rajapaksas, the former ruling clan, although their party still holds a majority in the legislature. While some in Sri Lanka see the senior politician’s recent election as reason for hope, others accuse him of “protecting” the discredited Rajapaksas, and stifling dissent by targeting critics.

IMF talks

Outlining his plans, including a 25-year national economic policy, President Wickremesinghe said he expects to conclude the staff level negotiations with the International Monetary Fund (IMF) “expeditiously and successfully”.

Colombo is counting on an Extended Fund Facility from the IMF, but the international lending institution has made its support contingent on “adequate financing assurances from Sri Lanka’s creditors that debt sustainability will be restored”.

Mr. Wickremesinghe said the government has “commenced” finalising its debt restructure plan in collaboration with Lazard and Clifford Chance, international financial and legal experts that Colombo hired for the purpose, after opting for a pre-emptive default on its $51 billion foreign debt in April. “We would submit this plan to the International Monetary Fund in the near future and negotiate with the countries who provided loan assistance. Subsequently, negotiations with private creditors would also begin to arrive at a consensus,” Mr. Wickremesinghe said, even as economists in Sri Lanka warn that the process of negotiating a debt restructure is complex and likely long-drawn.

Meanwhile, pointing to a “shrinking” middle class and widening income disparity in the island nation, Mr. Wickremesinghe underscored the need for initiatives targeting vulnerable communities, but did not mention any specific economic relief programme that his government might implement in that regard.

As Sri Lanka awaits an IMF programme, which could take months to be finalised, the government has sought bridge financing support including from India, which has already extended nearly $4 billion assistance this year, and China. Although Beijing’s assistance, totalling $2.8 billion, during the pandemic years was critical for Sri Lanka, it is yet to respond to Colombo’s request for further assistance, apart from a $74 million grant announced in May.

Help highlighted

President Wickremesinghe made a “special mention” of the assistance provided by India, in Sri Lanka’s efforts towards economic revitalisation. “The Government of India under the leadership of Prime Minister Narendra Modi, has given us a breath of life. On behalf of my people and that of my own, I convey our gratitude to Prime Minister Modi, the Government and people of India,” he told the House.