Colombia:
President Ranil Wickremesinghe has acknowledged that there was no point in pushing for economic reform in Sri Lanka because the poor island nation lacked an economy, while making a strong pitch for a new economic model.
Sri Lanka is experiencing its worst economic crisis since independence in 1948, caused by a severe lack of foreign exchange reserves.
In mid-April, Sri Lanka declared its international debt default due to the currency crisis.
Speaking at the inaugural session of the 2022 Sri Lanka Economic Summit on Monday, Ranil Wickremesinghe said the country’s beleaguered economy cannot be rectified with outdated economic systems.
With Sri Lanka’s economy spiraling continuously in recent times, Ranil Wickremesinghe acknowledged that economic reforms were not the antidote to the current malaise.
“What is the reform plan? Honestly, I don’t have a plan for it. What reforms if we don’t have an economy,” the Daily Lanka Mirror newspaper quoted Ranil Wickremesinghe as saying.
“What we want to do is build a new economy,” he explained.
The current economy is not worth reforming because it is so fragile that it will crumble again, the report said.
“Our trade balance is not in our favor. So are we going to rebuild the same structure and collapse again much faster? That’s why I didn’t think it was worth reforming,” said Ranil Wickremesinghe.
Strengthening foreign exchange reserves would be the main reform goal for our government, said Ranil Wickremesinghe, adding that developing Sri Lanka as a logistics center was also the need of the hour.
Colombo is seeking the release of a $2.9 billion bailout package from the International Monetary Fund (IMF), which was announced in September.
For this to happen, Sri Lanka needs to restructure its debt.
“We are now in talks with our creditors, bilateral creditors, with India and we had very successful talks and we started talks with China,” said Ranil Wickremesinghe. He said the development of the western terminal of Colombo Port with India’s Adani group was a pragmatic move.
“If you want to leave, you have to release the eastern terminal. We gave the first choice to Japan, if they don’t, we will ask others to come,” he added.
The Sri Lankan government appointed international legal and debt advisers for debt restructuring in May after the country declared its international debt burden for the first time in history.
Sri Lanka is on the brink of bankruptcy and has suspended servicing its $51 billion external debt, of which it must repay $28 billion by 2027.
Sri Lanka, a country of 22 million people, plunged into financial and political turmoil earlier this year due to a shortage of foreign currency.
This has left the island nation unable to afford key imports, including fuel, fertilizer and medicines, leading to long queues.
(Except for the headline, this story has not been edited by DailyExpertNews staff and is being published from a syndicated feed.)
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