Sri Lankan prime minister named head of finance ministry

Ranil Wickremesinghe is the sole parliamentary representative of the United National Party.

Sri Lankan Prime Minister Ranil Wickremesinghe was given the added responsibility of leading the finance ministry on Wednesday as the island nation grapples with the worst economic crisis in its history.

The South Asian island nation has suffered for months from severe shortages and anti-government protests, with importers unable to finance lifesaving food, fuel and medicine.

Wickremesinghe, 73, was sworn in as finance minister after two weeks of wrangling among coalition partners for the crucial position ahead of bailout talks with the International Monetary Fund.

His nomination was delayed by a dispute between Wickremesinghe and the Sri Lankan Podujana Peramuna Party (SLPP) of President Gotabaya Rajapaksa over who would take the post.

“The president’s party had wanted the finance portfolio, but the prime minister insisted he wanted it if he wants to pull the country out of economic chaos,” a senior politician involved in the dispute told AFP. negotiations, on condition of anonymity.

Wickremesinghe is expected to unveil a revised budget soon promising relief for the poorest Sri Lankans suffering from record inflation and soaring food prices.

Staff-level talks with the IMF ended on Tuesday, but it will take the Washington-based lender another six months to agree a bailout, central bank officials said.

Sri Lanka has already defaulted on its $51 billion foreign debt and on Tuesday appointed international consultants to help restructure its international sovereign bonds and other bilateral loans.

The government effectively ended fuel subsidies by raising prices to a record high on Tuesday, and Wickremesinghe’s administration is expected to raise electricity and water tariffs to boost much-needed revenue.

Petrol and diesel remain scarce and motorists are forced to queue, sometimes for days, to refuel.

new loan

The government announced this week that it was seeking a new $500 million loan from India to buy fuel, in addition to two lines of credit worth $700 million already provided by New Delhi.

The Census Bureau reported on Monday that the country’s headline inflation last month was 33.8% year on year, with food inflation even higher at 45.1%.

Sri Lanka’s foreign exchange reserves declined significantly from 2020 as the coronavirus pandemic hit tourism and Sri Lankans’ remittances abroad.

The pandemic has compounded liquidity problems triggered by huge tax cuts introduced in 2019 shortly after President Rajapaksa took office.

The protesters demanded that the president resign due to the government’s mishandling of the crisis.

His older brother, Mahinda Rajapaksa, stepped down as prime minister two weeks ago, paving the way for Wickremesinghe’s appointment.

(Except for the title, this story has not been edited by NDTV staff and is published from a syndicated feed.)

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