Business groups are seeking stabilization in Sri Lanka.
The COLOMBO, Sri Lanka – Sri Lankan business leaders on Friday demanded an end to political chaos amid demands from the public for the president’s resignation in the wake of allegations of poor economic management in the wake of warnings that failure to do so could cause financial ruin.
The leaders of 23 business associations representing import, export, and logistics firms spoke to reporters in Colombo, the capital city, Colombo, that they would like legislators to “act responsibly and resolutely to implement remedial solutions to halt and then reverse the rapidly deteriorating situation.”
The organizations warned that their sectors, which earn around $16.7 billion annually from exports of services and merchandise, are likely to stop If the current conditions continue.
The Indian Ocean island nation has faced its most severe economic crisis in the last few decades.
For the past few months, people in Sri Lanka have been waiting in line for hours to purchase fuel and cooking gas, food items, and medicines, which a majority of them originate from overseas and are paid in hard currency. The fuel shortage has resulted in continuous power interruptions lasting many hours per day.
The severity of the crisis was evident as Sri Lanka couldn’t pay for imports of essential goods due to its enormous debts and shrinking reserves of foreign currency. Sri Lanka has around $7 billion of international debt obligations due this year. Sri Lanka has to pay its foreign debts that exceed $25 billion in the next five years.
To end the situation in Sri Lanka, the new Central Bank Governor Nandalal Weerasinghe, declared that the Central Bank was speeding up the process of restructuring debt and also planned to request financial assistance through the International Monetary Fund.
He added that the move would “give a strong message to international investors, our creditors and market that we are going to come out from the crisis as soon as possible.”
His remarks came following his comments just after the Central Bank decided to increase the interest rates by 7 percent.
The bank stated that significant policy intervention is required to stop the growth of inflation driven by demand. It is also necessary to help maintain the rate of exchange.
Rohan Masakorala, director-general for the Sri Lanka Association of Manufacturers and Exporters of Rubber, stated that business owners are anxious since “something dangerous is heading towards us.”
“We need a stable political system,” said the president, noting that confidence needs to be restored “before we completely fall off the precipice.”
As secretary-general of the Joint Apparel Association Forum, which represents the country’s apparel industry, Yohan Lawrence has urged all participants to find a “viable and long-term solution.”
“We face a total economic collapse if nothing is done quickly,” he warned.
The garments industry is Sri Lanka’s top-earning foreign exchange, earning more than 5 billion dollars in income per year.
The nationwide protests over the country’s economic problems have grown to include criticism of president Gotabaya Rajapaksa and his politically influential family.
Many thousands of people from all kinds of backgrounds are protesting this week, calling for a solution to the crisis and demanding Rajapaksa resign.
Police deployed tear gas and water cannons to disperse around 1,500 students from the university who marched to the Parliamentary building on Friday.
Lahiru Mudalige, a student leader, has said that the only way to solve the problem is for the president to resign.
“As a student movement we took to the streets to chase out Gotabaya Rajapaksa,” He declared.
Rajapaksa has refused to quit even after members of his coalition joined him earlier this week. The governing lawmakers from the party called for the establishment of an interim cabinet to prevent violence.
Rajapaksa had previously proposed forming a united government; however, most of the opposition opposed the idea. Cabinet members resigned on Sunday. On Tuesday, more than 40 members of the coalition that are governing declared that they would not be voting according to the coalition’s guidelines, significantly weakening the power of the government.
This has transformed the crisis of the economy into a political one with no functioning Cabinet. Parliament has not been able to reach an agreement regarding how to tackle the current situation.
President Obama and his younger brother, Prime Minister Mahinda Rajapaksa, continue to be in power, despite the family members being the subject of the public’s anger. Five family members are legislators such as the Finance Minister Basil Rajapaksa, Irrigation Minister Chamal Rajapaksa, and nephew, the sports minister Namal Rajapaksa.
The government estimates that the covid-19 virus has caused the economy of Sri Lanka’s tourism-dependent 14 billion dollars in the past two years.
In the last month, Rajapaksa stated that his government was engaged in negotiations with the International Monetary Fund and had looked toward China and India to obtain loans. Moreover, his appeal to citizens to reduce their electricity and fuel use.