Colombo: Sri Lanka’s prime minister says its debt-laden economy has “collapsed” after months of shortages of food, fuel and electricity, and the South Asian island nation cannot even purchase imported oil.
“We are now facing a far more serious situation beyond the mere shortages of fuel, gas, electricity and food. Our economy has completely collapsed. That is the most serious issue before us today,” PM Ranil Wickremesinghe told Parliament.
“Currently, the Ceylon Petroleum Corporation is $700 million in debt,” he told lawmakers. “As a result, no country or organisation in the world is willing to provide fuel to us. They are even reluctant to provide fuel for cash,” he said.
Wickremesinghe said the government had failed to act in time to turn the situation around, as Sri Lanka’s foreign reserves dwindled.
“If steps had at least been taken to slow down the collapse of the economy at the beginning, we would not be facing this difficult situation today. But we lost out on this opportunity. We are now seeing signs of a possible fall to rock bottom,” he said.
Sri Lanka has been muddling through mainly supported by $4 billion in credit lines from neighbouring India. But Wickremesinghe said India would not be able to keep Sri Lanka afloat for too long.
India offers help
A top Indian official has held talks with Lanka’s president and prime minister as India signals its willingness to go beyond the $4 billion in loans, swaps and aid that it has already provided its cash-strapped neighbour.
Indian Foreign Secretary Vinay Kwatra, accompanied by finance ministry officials, held talks with President Gotabaya Rajapaksa and Prime Minister Ranil Wickremesinghe in the commercial capital, Colombo, officials said.
“Underlined India stands ready to help Sri Lanka in quick economic recovery through promoting investments, connectivity and strengthening economic linkages,” Indian foreign ministry spokesman Arindam Bagchi posted on Twitter.
The Indian team held a separate meeting with Wickremesinghe, the central bank governor and finance ministry officials, an official from the prime minister’s office said.
