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ECONOMYNEXT – Sri Lanka President Gotabaya Rajapaksa is exploring steps to decentralize key public institutions to reduce number of public servants coming to capital Colombo and give priority to youth-led agriculture to achieve greater productivity, his office said on Saturday (11) as the country is facing its worst economic crisis with fuel shortage and a looming food crisis.

Government officials have told EconomyNext that Rajapaksa administration is facing difficulty in ensuring fuel supply for public transport as its foreign reserves are exhausted for imports and repay foreign loans in the past two years.

The government has already reduced the number of working days for many government sector employees for four in a week to save fuel. Government officials told EconomyNext that a special holiday declared for next Monday is also an attempt to save fuel and energy along with an already declared holiday on Tuesday.

Sri Lanka is facing a looming food crisis because farmers could not produce adequate food after President Rajapaksa banned chemical fertilizer overnight in April last year while foreign currency shortage along with sharp depreciation of the US dollars have made food imports very expensive.

The President has said “the decentralization of key public institutions in the capital to the provinces could reduce the number of public servants coming to Colombo”, the President’s Media Division (PMD) said in a statement.

The President made the remarks at a special discussion held at the President’s House on Friday (10) on the role of the Ministry of Public Administration, Home Affairs and Local Government and the accelerated home gardening programme.

The key public institutions are located in capital Colombo and thousands of public servants are coming into Colombo from other districts and provinces for employments and get their essential services done. Such centralized efforts have increased fuel consumption in the island nation which is struggling to ensure fuel for motorists and generate power amid extended power cuts since February.

President Rajapaksa has also focused on increasing the farm products to boost agriculture, the PMD said. The economic crisis followed by excess money printing and sharp depreciation of the rupee has also raised the food prices to expensive level with food inflation hit 57.4 percent in May.

The Ministries of Public Administration and Agriculture have decided to launch a combined national food security programme titled “Let’s Grow Together – Win the Country”, PMD said.

“The President also advised to give priority to youth in agriculture sector to achieve greater productivity and to plan for higher yields using new technology,” the PMD said. (Colombo/June 11/2022)

ECONOMYNEXT – The Executive Director of the United Nations World Food Programme (WFP) is planning to visit Sri Lanka on an invitation of Prime Minister Ranil Wickremesinghe, his office said as the country is facing a looming food shortage.

Rice production is hit by lack of chemical fertilizer usage in the last two cultivation seasons while foreign currency shortage has prevented the Island nation of importing essential foods as in the past, leading to a looming food shortage.

Wickremsinghe has said the country could suffer a food shortage from August onwards.

Wickremsinghe said he spoke to David Beasley, the Executive Director at the UN WFP late on Friday and invited him to visit Sri Lanka.

“He accepted my invitation and is planning to visit shortly. We appreciate all the support extended to us by the WFP,” Wickremsinghe tweeted.

The prime minister’s invitation came a day after the UN and non-governmental agencies launched a 47.2 million US dollar Humanitarian Needs and Priorities (HNP) Plan to provide life-saving assistance to 1.7 million people worst-hit by the economic crisis over a four-month period, from June to September in Sri Lanka, the UN said on Thursday.

Many families will be unable to meet their basic food needs, if it does not act now, UN Resident Coordinator in Sri Lanka Hanaa Singer-Hamdy has said in a statement.

Sri Lanka’s currency has collapsed after being under a soft pegged control until March this year.

Sri Lanka which earns a billion US dollars a month in exports and earns about 600 million US dollars in remittances, about half of which are coming to the recipients through unofficial channels boosting family incomes cannot find 25 million US dollars for medicines due to price controls and a broken peg.

Staples have also become expensive with food inflation stood at 57.4 percent in May, while shortages of key food items, as well as fuel for cooking, transport, and industry, remain widespread, with ongoing daily power outages. (Colombo/June10/2022)

ECONOMYNEXT – Sri Laka’s state-run Litro Gas Lanka Ltd Chairman Vijitha Herath resigned from the position Friday (10) afternoon after a stint of little over two months.

Herath was appointed in April, a week after previous Chairman Theshara Jayasinghe resigned resigned blaming ex-ministers and the administration for the country’s economic crisis.

The reasons for Herath’s departure were not immediately clear. Delays in cooking gas distribution has caused much public inconvenience, with long queues for gas cylinders still a common sight, particularly outside of Colombo.

Litro was the sole cooking gas provider in the island from early this year when the privately owned Laugfs Gas was left unable to import gas due to dollar shortages making it difficult for the company to open letters of credit.

The forex crunch hit Litro from mid-May, leaving the company unable to distribute cooking gas for short periods of time. The company issued distribution plans and urged the public not to queue up for fuel.

Herath had previously served as chairman of Sri Lanka Insurance and the Ceylon Electricity Board. (Colombo/Jun10/22)

ECONOMYNEXT – Sri Lanka’s Ministry of Finance on Friday (10) signed an agreement with the EXIM Bank of India for a 55 million US dollar credit line to procure 65,000 tonnes of urea from India, the Prime Minister’s office said.

The request for the credit facility was sought to purchase fertilizer to meet immediate demands during the yala cultivation season.

Prime Minister Ranil Wickremesinghe has repeatedly warned of a looming food crisis in Sri Lanka if preventative measures aren’t taken on time.

The PM’s office said the credit facility could “help to ensure the availability of urea for the upcoming yala season.” (Colombo/Jun10/2022)

ECONOMYNEXT – Despite a full-order book at the moment, Sri Lanka’s apparel exporters feel their customers shifting their orders to de-risk from Sri Lanka’s ongoing crisis.

The five billion dollars industry, a top dollar earner of the country, so far has a full order book.

But for the second season (the industry runs on a six-months cycle) that is to begin in July, exporters are saying they are seeing signs of customers pulling out to be on the safer side.

“We are seeing a reduction on the horizon and that is not because of the sector’s ability to deliver to the customer but more because of the customer seeing the country as risk; so to de-risk what they have in Sri Lanka,” Yohan Lawrence, Secretary General of Joint Apparel Association Forum of Sri Lanka, said.

“Where they bought 100, they’ll buy 80. The impact will probably be seen in July/August.”

If the apparel customers of Sri Lanka start to cut down on orders now, the impact of that will be seen only in July or August when the new production season starts.

“We are seeing early signs of customers moving orders to other countries, mainly because they are worried about the country’s social stability,” Rehan Lakhany, former Chairman of Sri Lanka Apparel Exporter Association, said.

“Mainly with what they (customers) see on the news in foreign media, they are worried about whether we are able to operate our factories and if we can deliver goods on time to their stores.”

Customers are sending questionaries to exporters on a daily basis inquiring about the country’s situation.

“We need to show stability in our ports, transport sector, and diesel supply. Unless some concrete assurance is given to them, not just verbal [assurance, they will move orders],” said Lakhany.

He added that there’s unnecessary fear among buyers, but regardless, the country needs to show them that the banks are able to make payments on time and give assurance that operations are running as usual.

The main three factors worrying them now is the shortage of liquidity of dollars in the bank, Lakhany said.

“A lot of the banks don’t have dollars now. Even if we give them a 100 million from exports, they are not able to give us the same 100 million for the import of raw materials.

“We have taken orders, but banks are unable to make the payments. Banks are having liquidity issues in foreign currency.”

The second concern buyers have is the fuel shortage as generators must be run during power cuts and to transport employees.

The third concern is social stability of the country.

In the first four months of 2022, the industry has earned 1.8 billion dollars.

Hanging by a thread

The 30-year-old Sri Lanka’s apparel industry, once known for its quality and reliability has become a question mark among its customers as social instability and a severe dollar and fuel shortage continue to cripple the country.

Compared to regional competitors, Sri Lanka’s garment export size is very small but the quality of its products has made it a favorite among its dollar rich European and American buyers

The Export Development Board (EDB) specifically notes that the island’s fame in apparel is because of its “excellence in speedy delivery and reliability.”

The “Made in Sri Lanka” label is synonymous with quality, reliability, social and environmental accountability, EDB says.

But it all may come to an end as the country goes through its worst economic created by years of bad monetary practices funneled by money printing.

Lakhany says no matter how much they try to say that despite the challenges factories and businesses are operating, the customers are not ready accept it.

To aggravate the situation, Shanghai in China has opened up following a two-month strict COVID-19 lockdown.

This Lakhany sees as bad news for Sri Lankan businesses as now the customers have more options to make an easy shift. Shanghai is one of the world’s largest apparel and textile exporters.

Therefore losing even 20 percent of the orders or one month’s export (500 million dollar on average), the exporters say the impact will be multifold.

“If we lose orders, the impact will be unimaginable. The apparel industry runs on margins. Even if we lose 20 percent of orders, the impact will be 80 percent. Factories will end up shutting down,” Lahany said.

He fears that the factories might not be able to provide for the workers.

There are close to 800,000 workers relying on the industry.

On top of this, the manufacturers have difficulty in paying their suppliers who, after being delayed payments, have started to ask for those payments.

“One of our biggest suppliers has been outstanding for so long they want us to pay the supplier. But we can’t pay because the banks are not releasing funds,” Lakhany said.

“So there are multiple factors, and customers pulling out is the last nail on the coffin.”

“If they pull out without any ground and just out of fear, the impact that will be felt in the next four months will be unstoppable.”

The exporters say action must be taken now to mitigate the risks before it’s too late. (Colombo/Jun10/2022)

ECONOMYNEXT – The United Nations have launched an appeal to raise 47.2 million US dollars to help 1.7 million persons hardest hit as the country’s currency collapsed from 200 to 360 to the US dollar after the central bank mis-targeted interest rates using ‘flexible’ policies.

The UN and non-governmental agencies launched a 47.2 million US dollar Humanitarian Needs and Priorities (HNP) Plan “to provide life-saving assistance to 1.7 million people worst-hit by the economic crisis over a four-month period, from June to September,” the agency said.

“Multiple factors are impacting Sri Lanka’s food security situation; if we don’t act now, many families will be unable to meet their basic food needs,” UN Resident Coordinator in Sri Lanka Hanaa Singer-Hamdy said in a statement.

There was an “urgent need to prevent a humanitarian crisis later in the year, while bridging efforts towards development and socio-economic interventions.”

Sri Lanka which earns a billion US dollars a month in exports and earns about 600 million US dollars in remittances, about half of which are coming to the recipients through unofficial channels boosting family incomes cannot find 25 million US dollars for medicines due to price controls and a broken peg.

“Sri Lanka’s once-strong healthcare system is now in jeopardy, livelihoods are suffering and the most vulnerable are facing the greatest impact,” Hanaa Singer-Hamdy said.

“Now is the time for the international community to show solidarity with the people of Sri Lanka.

“The UN and humanitarian partners are calling on donors, the private sector and individuals to urgently support this plan to provide life-saving assistance to the women, men, and children most affected by the crisis and thus prevent a deterioration of humanitarian needs in the country.”

“Sri Lanka, formerly an upper-middle income country, is facing its worst economic crisis since independence,” the UN said.

“In May, food inflation stood at 57.4 per cent, while shortages of key food items, as well as fuel for cooking, transport, and industry, remain widespread, with ongoing daily power outages.”

Sri Lanka is facing the fate of many developing countries with economists who have rejected the classical economic principle of sound money and embraced the mercantilist principle of mis-using people’s money for stimulus or export promotion by destroying real wages.

COLOMBO (News 1st); The United Nations team in Sri Lanka and non-governmental organisations launched a joint Humanitarian Needs and Priorities (HNP) Plan today (9), calling for US$47.2 million to provide life-saving assistance to 1.7 million people worst-hit by the economic crisis over a four-month period, from June to September. This directly responds to the Government UN calls for US$ 47 Mn for Sri Lanka assistance

ECONOMYNEXT – Cash-strapped Sri Lanka’s former Finance Minister Basil Rajapaksa vacated his parliamentary seat on Thursday (09) downplaying his role in the country’s worst ever forex crisis, without ruling out a comeback, and likening the Rajapaksa family to India’s RSS.

Exactly one month after his older brother and then Prime Minister Mahinda Rajapaksa resigned against a backdrop of bloody violence, the younger Rajapaksa announced his departure from the legislature Thursday morning at the Sri Lanka Podujana Peramuna (SLPP) headquarters where he fielded questions from reporters eager to press him on his part in the ongoing calamity.

Rajapaksa appeared to be in a beaten-but-not-defeated mood as he attempted to use humour to deflect questions about his responsibility and, at one point, even seemed to shift the blame to the very people who had voted for his party, the SLPP.

“No, I’m not passing the buck to the people. But yes, they do hold some responsibility for electing us to power. If, as you say, we passed the buck, then those who gave us the buck in the first place are also responsible,” said Rajapaksa, quickly recovering from a question that had visibly agitated him

It was the one moment in the hour-long press briefing in which he lost his cool.

The former finance minister’s ouster was one of the key demands of Sri Lanka’s protesting public. Among the anti-government slogans shouted at protests islandwide was the earworm “Kaputu kaak, kaak, kaak” followed by a chorus of “Basil, Basil, Basil, Basil.” The somewhat elitist meme originated from a video in which Rajapaksa was heard using the Sinhala word for crows, “kaputas”, in the plural form, at a discussion held in English, for which he was relentlessly mocked on social media.

Asked to comment on his “new brand”, Rajapaksa claimed that he had made the singsong protest slogan his phone’s ringtone.

“I mean, it’s not a bad animal, really. I hold no grudge against any being. I do not seek vengeance.

“It’s my ringtone now. The phone goes ‘Basil Basil’ when it rings.

“The first bit is played back at a lower volume,” he added with a chuckle.

On more serious matters, Rajapaksa was no less facetious. When questioned about the erosion of Rajapaksa popularity, he said: “I think we can see that our family is better at politics than at governance.”

The former minister and architect of the SLPP said that there are such cases globally.

“India’s RSS has been around for years, but they do not govern directly. The BJP has taken on that role,” he said.

However, he does not foresee an immediate end to the Rajapaksa dynasty.

“Sri Lankans elected a Rajapaksa president three times: twice with Mahinda Rajapaksa, and once with Gotabaya Rajapaksa,” he said.

As for his own plans, the youngest Rajapaksa sibling said though he has retired from governance, he will continue to play an active role in politics. His resignation from the SLPP’s national list slot, he said, was for someone the party deems suitable to take his place.

Speculation has been rife that that someone will be businessman Dhammika Perera. Rajapaksa’s answers to questions about Perera’s entry to active politics were vague, at best.

“I don’t know about that. That is a decision that’s up to the party.”

However, he did say later on that if Perera wishes to implement some of the plans he had proposed for the country, there is no reason he should not be given an opportunity to do so. The same is true, he said, for anyone from the ‘aragalaya’, Sri Lanka’s youth-led protest movement.

“I invite anyone from the Aragalaya to take my place,” he said.

Regarding the economic crisis and the immense hardships imposed on the public, apart from a hurried “apology” at the end of the press briefing for any mistakes made during his tenure as Finance Minister, there was no heart-rending mea culpa from the former MP.

He brushed aside any suggestion from the journalists present that he and the Rajapaksa administration had been the authors of the agony the people were now feeling.

“I’m no longer finance minister.

“Since 1951, this country has been run the same way, on debt. No government has tried to change this. After my appointment, I tried to some extent enable the people to stand on their own feet.

“It may or may not have worked, but if there is something this country is getting now [in terms of financing], it is only what I was able to secure as finance minister,” he said.

Pressed for more honesty, Rajapaksa claimed the crisis was already there when he came on board as finance minister. He forcefully rejected suggestions by journalists that his government was responsible for the erosion of Sri Lanka’s foreign reserves which had stood at seven billion US dollars in late 2019 when his brother President Gotabaya Rajapaksa was sworn in.

“There was no seven billion dollars when I came on. I do not accept that reserves went down to zero under me. There were no reserves when I was appointed,” he said, adding that fertilizer and other essentials were being purchased today with loans that he had helped secure.

Rajapaksa said the government had been divided on approaching the IMF for assistance, and that reconciliation between two pro and anti-IMF camps had to be achieved.

“I sent the first letter to the International Monetary Fund (IMF). It was after that that two IMF officials came and met me and President Rajapaksa,” he said.

President Rajapaksa had earlier said in a televised address to the nation that it was a mistake to not go to the IMF. Former Finance Minister Rajapaksa, however, in some apparent revisionism said that the president had in fact said the IMF should’ve assisted Sri Lanka sooner.

There has been speculation that the proposed 21st amendment to Sri Lanka’s constitution is being delayed due to machinations by Basil Rajapaksa against a provision to ban duel citizens from entering parliament. Rajapaksa is a US citizen and visits that country regularly. Some former influential government ministers who now function as independent MPs in parliament famously called him the “Ugly American” and accused him of carrying out a US agenda, a claim which Rajapaksa rejects.

“Personally I’m opposed to the 21st amendment,” he said, but added quickly that it was not due to personal reasons.

A constitution must serve the public interest, he said. “We can’t take the power given by 6.9 million voters to one leader and confer that on someone who only managed over 250,000 votes,” he said, referring to Sri Lanka’s newly sworn in Prime Minister Ranil Wickremesinghe.

“I definitely support certain aspects of the 21st amendment, such as the provisions on independent commissions.

“I don’t know if the amendment will pass,” he said, adding however that decentralisation of power to benefit the public is important.

If the executive presidency is to be abolished, Rajapaksa said, Sri Lana’s provincial council system – a legacy of the 1987 India-Sri Lanka Accord – must be reformed in the interest of maintaining the island nation’s sovereignty and unitary character.

Though he would personally have voted against it, he said, the decision to vote for the amendment or not remains with the party, which he says he will continue to work with.

Basil Rajapaksa leaves parliament, which he entered as an unelected MP via the national list, with Sri Lanka’s economy freefalling around the hapless and increasingly desperate citizenry.

He, however, believes he did his best.

“I think I did [do something] to the best of my ability. But I couldn’t do everything the people had expected,” he said.

Asked if his resignation was a permanent one, Rajapaksa said: “If the people decide so, perhaps; but if they want me back, I’m ready for that too.”

“I know it’s going to be even more difficult going forward. We must all work together. We’re ready to extend any help to the present administration and whoever may be coming next,” the former minister said.

He expressed hope that global conditions will also improve, facilitating Sri Lanka’s recovery.

“I hope the Ukraine crisis is resolved and tourism will pick up again.

As he stood up to leave the briefing he said: “I would also like to express my sincere apologies to the people if there were any mistakes made.” (Colombo/Jun09/2022)

ECONOMYNEXT – Sri Lanka’s President Gotabaya Rajapaksa met envoys of India, China, and Middle Eastern countries and asked for assistance amid the island nation’s worst-ever economic crisis that is now facing a looming food shortage.

The President’s Media Division (PMD) on Thursday said Rajapaksa met envoys of the Middle East, India, and China early on Thursday.

“President Rajapaksa requested the diplomats to extend all possible assistance for Sri Lanka in resolving the existing situation,” the PMD said in a statement.

“He also expressed his appreciation for the assistance provided by those countries so far.”

Rajapaksa separately in his official twitter said: “I requested their assistance in resolving the existing crisis, while briefing them on the current economic, social and political situation of Sri Lanka. Appreciate their positive response.”

Sri Lanka has run out of foreign currency reserves and already defaulted on sovereign debts. The island nation has also started talks with the International Monetary Fund (IMF) for a loan while it has also started foreign debt restructuring.

The country has been seeking for kindness and bridging finance in the form of credit lines to fund the imports including fuel, cooking gas, medicines, and food to weather the hardest period of the economic crisis.

Economists have predicted the crisis to prolong for years until Sri Lanka manages to earn surplus dollars by boosting exports, tourism, and remittances while maintaining prudent fiscal reforms.

The economic crisis hit the ground after President Rajapaksa’s fertilizer ban sharply reduced agriculture production and a sovereign debt default amid delays in IMF talks.

Rajapaksa’s failure in maintaining appropriate economic policies including fiscal reforms to raise government revenue accelerated the pace of the crisis. (Colombo/June 09/2022)

ECONOMYNEXT – When Ranil Wickremesinghe was appointed Sri Lanka’s Prime Minister for a record sixth time on May 12, some hoped he could use his international relations and economic expertise to ensure the supply of essentials like fuel, cooking gas, and medicines as well as uninterrupted power supply.

However, queues for gas and fuel have become longer in the one month since Wickremesinghe took over the challenge to stabilize the economy.

Though Sri Lanka earns about a billion US dollars in exports, about 500 million remittances (about half comes through unofficial channels) and about 300 more from services, and most debt repayment is suspended, the country is faces forex shortages with a failed float

Monetary stability is yet to be restored with money still being printed and a surrender requirement in place.

Transport has become a challenge with fuel prices skyrocketing in rupee terms as the rupee collapsed after to two years of mis-targeted interest rates in the worst currency crises in the history of the country’s Latin America style central bank.

People are struggling to manage their daily meals with the currency collapse putting food out of the reach of the less affluent. Many elders are finding it hard to ensure a continuous supply of medicine.

Wickremesinghe began by telling the truth about the island nation’s real economic situation. He publicly spoke about external debt, the importance of seeking help from the International Monetary Fund (IMF) and working with international partners like India, China, and Japan.

Almost four weeks after his appointment, Wickremesinghe is struggling to deliver on the essentials for the public, as monetary stability continues to elude the country and foreign exchange shortages persist.

Here are some of the key questions and answers on Wickremesinghe’s statements and his role as the new prime minister of Sri Lanka since May 12.

What did Wickremesinghe say before becoming the prime minister?

He advocated for IMF assistance to face the economic crisis. He accurately predicted power cuts, the dollar shortage, and difficulties in importing essentials. The leader of the United National Party (UNP) for the past 26 years called on the Government to place its top priority on resolving the economic crisis and warned that a delay would make recovery difficult. He has also predicted the situation yet to come if the number of persons losing employment increases, companies collapse, and food problems. He said Sri Lanka should not have suspended debt payment and gone to the IMF earlier when the country was still creditworthy. Wickremesinghe also said both the government and opposition should join hands to come out of the crisis.

What was the reality when the new prime minister took over?

Four days after his appointment as the “crisis prime minister”, Wickremesinghe found the Sri Lankan economy was “extremely precarious”.

In country with a soft-pegged exchange people suffer when the currency collspses, and budgets become almost impossible to manage though inflation can bring in nominal revenues as long as salaries are not hiked.

He wanted to establish a national assembly or political body with the participation of all political parties to find solutions to the present crisis. He proposed an all-party government and some new parliament committees to make the president and cabinet accountable to parliament. He also promised to bring in a new constitutional amendment to reduce the powers of President Gotabaya Rajapaksa whose stubborn and wrong policy decisions and mismanagement has been blamed for Sri Lanka’s ongoing crisis.

He promised to build a nation “without queues for kerosene, gas, and fuel; a nation free of power outages; a nation with plentiful resources where agriculture will flourish; a nation where the future of the youth is secure; a nation where people’s labour need not be wasted in queues and in struggles; a nation where everyone can lead their lives freely with three square meals a day”.’

Wickremesinghe said the budgets revenue numbers were inflated and the actual revenue would be 30 percent below target and expenses would be higher and the deficit would be wide.

Wickremesinghe soon realised that the reality was much worse than what he had expected, a close ally told EconomyNext.

“This is the reason he warned of power cuts likely to be increased to 15 hours a day, though it hasn’t happened so far,” the ally said asking not to be named.

“The situation is getting worse. There is no foreign currency to buy food from September onwards. We may face an acute food shortage in September because we have not produced adequate rice in the last year and this year,” the source said.

Up to June most food imports were coming freely as open account imports were allowed. But from June 07 open account imports were banned at the request of the central bank creating questions whether the formal banking system can give dollars in time.

Wickremesinghes fiscal fixes

The new premier is now trying to come up with a budget where capital spending is cut and has to spend more money as a safety net to the people pushed deeper into poverty by central bank money printing.

However, Wickremesinghe has raised Value Added Tax (VAT) to 12 percent from 8 percent and a telecommunication levy to 15 percent to increase government revenue. More taxes are planned from Otober

The government is also in the process of cutting its expenditure as much as possible.

However 695 billion supplementary estimate is planned.

He has proposed privatisation of loss-making state carrier SriLankan Airlines.

Fuel prices have been adjusted to a market rates. Wickremesinghe told the media that he would be compelled to permit printing money in order to pay state-sector employees and to pay for essential goods and services.

Wickremesinghe also predicted what he said would be the most difficult two months through July, but attempted to reassure the public that Sri Lanka’s foreign allies will assist. They have already pledged their support, he said.

Since his takeover, Wickremesinghe has been doomsaying about a looming food shortage, starvation, a complete lack of dollars for imports, extended power cuts, and a longer than expected recovery time from the crisis.

He said the situation will worsen further before recovery starts.

What has happened now?

Opposition members and political analysts observe that there has been hardly any change since Wickremesinghe took over.

In fact, many say the number and length of the queues for cooking gas and fuel have multiplied, though power cuts have reduced with rains coming back,

Some political analysts say the hopes of Wickremesinghe reviving the economy are fading because he has not been able to live up to the expectations of the common man, who had believed the new prime minister would bring in more dollars to the country, and ensure required policy changes to drive the economy in a different direction for a sustainable debt repayment and growth.

A quick wrap of an IMF program has not also materialized as a debt re-structuring effort takes time.

Why is there a delay in the implementation of Wickremesinghe’s promises?

Political analysts say the lack of a majority for Wickremesinghe in parliament and some major differences between him and President Rajapaksa’s Sri Lanka Podujana Peremuna (SLPP) on policies has got in the way of political reforms.

There has been no consensus on the constitutional amendment, which is key for political stability.

A former SLPP cabinet minister told EconomyNext that some international partners have indirectly indicated they are waiting for political stability after a constitutional amendment to help Sri Lanka.

Some SLPP members are not in favour of the new amendment – the 21st – because it will force former finance minister Basil Rajapaksa out of parliament due to his duel citizenship and President Rajapaksa to lose the powers he has been enjoying so far.

Wickremesinghe is also being criticized for taking up the post unconditionally in a move to protect the Rajapaksas from being forced out of politics.

That had discouraged some key opposition parties from backing him. Few of them are ready to back Wickremesinghe as long as Rajapaksa remains a powerful president.