Sri Lanka’s new president said Wednesday that his government is preparing a national policy roadmap for the next 25 years that aims to cut public debt and turn the country into a competitive export economy as it seeks a way out of its worst economic disaster.
President Ranil Wickremesinghe in his speech to Parliament said Sri Lanka needs long-term solutions and a strong foundation to stop a recurrence of economic crises.
Massive public protests have blamed Wickremesinghe’s ousted predecessor, Gotabaya Rajapakasa, and his powerful family for years of mismanagement and corruption that have bankrupt the nation and led to unprecedented shortages of essential imports like fuel, medicine, and cooking gas. But many are still skeptical of Wickremesinghe and accuse him of trying to protect the former leader and his relatives.
Sri Lanka announced in April that it is suspending repayment of foreign loans. Its total foreign debt is $51 billion, of which it must pay $28 billion by 2027.
Wickremesinghe said his government had initiated negotiations with the International Monetary Fund on a four-year rescue plan and had commenced the finalization of a debt restructuring plan.
“We would submit this plan to the International Monetary Fund in the near future, and negotiate with the countries who provided loan assistance. Subsequently negotiations with private creditors would also begin to arrive at a consensus,” he said.
Wickremesinghe had said earlier that negotiations with the IMF have been difficult because of Sri Lanka’s bankruptcy and that an expected early August target for an agreement with the agency was not possible and is now expected in September because of social unrest in the country.
He said the hardships had eased somewhat with reduced power cuts, fertilizers being brought in for cultivation, and cooking gas distribution improving.
“Safety measures have been taken to avoid food shortages. Bringing essential drugs and medical equipment to the hospitals has been initiated. Schools have been reopened. Measures are being taken to overcome the impediments faced by the industries and export sectors,” he said.
Instead of relying on foreign loans for fuel imports, Sri Lanka should initiate a system where export income and foreign workers’ remittances are used for purchases, Wickremesinghe said.
“We also have to limit selected imports in order to balance the payments for fuel. On the other hand, fuel supply has to be curtailed. These hardships would need to be borne until the end of this year.”
He thanked neighboring India’s Prime Minister Narendra Modi for giving Sri Lanka a breath of life by providing timely assistance through credit lines and loans to buy food, medicine, and fuel.
Wickremesinghe said the government’s aim is to create a surplus in the primary budget by the year 2025 and to bring down public debt, currently at 140 percent of GDP, to less than 100 percent by 2032.
“The economy should be modernized. Economic stability should be established and transformed into a competitive export economy. In this context, we are now preparing the necessary reports, plans, rules and regulations, laws and programs,” he said.
“If we build the country, the nation, and the economy through the national economic policy, we would be able to become a fully developed country by the year 2048, when we celebrate the 100th anniversary of independence,” Wickremesinghe said.
Wickremesinghe was elected president last month to complete the rest of Rajapaksa’s five-year term, which ends in 2024. Rajapaksa fled the country after protesters, furious over the economic hardships, stormed his official residence and occupied several key government buildings.
Wickremesinghe cracked down on protests and many leaders of demonstrations have been arrested on charges of trespassing and damaging public property. Protest camps set up in front of the president’s office were dismantled by armed soldiers who beat up protesters.
However, Wickremesinghe on Wednesday denied that he was “hunting down” protesters.
He said he will protect peaceful protesters and opened an office to handle complaints of any wrongful action. People who violated the law unknowingly or at the instigation of others will be dealt with “sympathetically” while those who were involved in violence intentionally will be prosecuted, he said.
Wickremesinghe said that since young people had taken the lead in protests and wanted a change in the political system, he will make way for more youth to attend Parliament in the next election.
“The next election should be the term of the youth. I consider that the creation of a new constitution with new attitudes in order to provide space for youth is one of the main priority tasks. “
He sought amity among political parties, saying only an all-party government can solve the country’s problems.
“The expectation of all the citizens of the country at this juncture is for all their representatives in Parliament to work together in order to build the country,” he said.