Wickremesinghe told lawmakers that negotiations with the International Monetary Fund IMF to revive the country's collapsed economy are difficult because the South Asian nation of 22 million has entered the talks as a bankrupt country rather than a developing country.
We are now participating in the negotiations as a bankrupt country. Wickremesinghe said in parliament that we have to face a more difficult and complicated situation than previous negotiations.
He said that because of the state of bankruptcy our country is in, we have to submit a plan on our debt sustainability to the International Monetary Fund. Only when they are satisfied with the plan can we reach an agreement at the staff level. This is not a straightforward process. Sri Lanka is in the midst of its worst financial crisis in seven decades after its foreign exchange reserves plunged to record lows, with dollars running out to pay for essential imports such as food, medicine and fuel.
Schools have been suspended and fuel has been limited to essential services. In several major cities, including Colombo, hundreds of people queue for hours to buy fuel, sometimes clashing with police and the military as they wait. On Sunday, Sri Lanka's energy minister, Kanchana Wijesekera, said that the country had less than a day's worth of fuel left. Our country was going to have to face a crisis in terms of fuel and food at some point in time. Food prices went up, he said, adding that international crises like Russia's war in Ukraine have made things worse. This situation has become more acute because of the recent global crises and we who were in the frying pan fell into the oven, Wijesekera said. On Tuesday, the prime minister Wickremesinghe said he hoped that a report on debt restructuring and sustainability would be submitted to the International Monetary Fund by August. After an agreement is reached, a comprehensive loan assistance program will be prepared for a period of four years, according to Wickremesinghe. As Sri Lanka runs out of fuel, doctors and bankers protest 'impossible situation' His speech in parliament was interrupted by opposition lawmakers chanting cries of Gota go home, a reference to President Gotabaya Rajapaksa, who was in attendance. Large numbers of Sri Lankans have been calling for Rajapaksa to resign over accusations of economic mismanagement. By the end of the year, inflation will rise to 60%, according to Wickremesinghe. This will be a difficult and bitter journey, Wickremesinghe said. We can get relief at the end of this journey. Progress can be made. The British government said on Tuesday it is advising against all but essential travel to Sri Lanka due to the impact of the economic crisis.