Sri Lanka is facing record high inflation and prolonged power outages. (File)
Colombo:
Sri Lanka closed schools and shut down non-essential government services on Monday, and has begun a two-week shutdown to conserve rapidly depleting fuel reserves as the IMF opened talks with Colombo about a possible bailout.
The country of 22 million people is suffering its worst economic crisis after it runs out of foreign exchange to finance even the most essential imports, including food, fuel and medicines.
On Monday, schools were closed and state offices were working with skeleton staff as part of the government’s plans to reduce commuting and save precious petrol and diesel.
Sri Lanka faces record inflation and prolonged power outages that have contributed to months of protests – sometimes violent – calling on President Gotabaya Rajapaksa to resign.
Thousands of students marched through the streets of Colombo on Monday chanting “Gota go home” in reference to the president, who they accuse of corruption and mismanagement.
“The time for Gotabaya to bow with dignity is long gone,” student leader Wasantha Mudalige told reporters. “Now we have to chase him away.”
Police arrested 21 student activists who blocked all gates to the presidential secretariat building as they declared a “day of mourning” for the nation on Monday, Rajapaksa’s 73rd birthday.
Officers said the students had blocked the secretary of Sri Lanka’s Ministry of Finance from attending an important meeting with International Monetary Fund officials.
But Prime Minister Ranil Wickremesinghe’s office said talks with a visiting IMF delegation, the first face-to-face talks since Sri Lanka called for a rescue package in April, were going according to plan.
Both sides said talks would last until the end of the month.
A financial bailout is not expected until Colombo agrees with creditors to restructure its $51 billion foreign debt, a process that could take months, according to both Sri Lankan and IMF officials.
The country defaulted on its debts in April and switched to the IMF, which has asked Colombo to raise taxes and restructure loss-making state-owned companies.
Most offices in Sri Lanka were closed on Monday and all schools were closed, but hospitals and the main sea and airports in the capital were still operating.
Hundreds of thousands of motorists waited in mile-long lines across the country for petrol and diesel, despite the Department of Energy announcing that fresh supplies would not arrive for three days.
Australia is participating
Wickremesinghe’s office said he had visited Australia’s Home Secretary Clare O’Neil to “deepen cooperation and assist Sri Lanka as the country faces very difficult economic times”.
Canberra announced $35 million in emergency aid to meet the impoverished island’s urgent food and health care needs.
“Not only do we want to help the people of Sri Lanka in times of need, there are deeper implications for the region if this crisis continues,” Australian Foreign Secretary Penny Wong said in a statement.
Australia is a member of the “Quad”, a diplomatic group with India, Japan and the United States that has expressed concern about China’s growing influence in the region.
China owns more than 10 percent of Sri Lanka’s external debt and has invested heavily in infrastructure on the strategically located island, which lies along the main east-west international shipping route.
The United Nations last week launched an emergency response to feed thousands of pregnant women facing food shortages in Sri Lanka.
Four out of five people in the country have started skipping meals because they cannot afford high food prices, the UN said. It warned of an imminent “critical humanitarian crisis” with millions of people in need of assistance.
(Except for the headline, this story has not been edited by DailyExpertNews staff and has been published from a syndicated feed.)
