Sri Lankan President Gotabaya Rajapaksa, who has been under criticism over the deteriorating economic situation, seems to have directed his anger against his own allies in the government. Two weeks after sacking the agriculture secretary who warned of a food crisis, he has now sacked a minister for criticizing some of his policies.
The reckless dismissal of Minister of State Sushil Premjayanta did not go down well with the ruling SLPP and several MPs and ministers are expressing their displeasure in private. Realizing that the situation is getting out of hand, Gotabaya, a former military personnel, has warned his ministers and lawmakers not to speak publicly against the government.
It is immoral to speak against one’s own party and government. If they have any disagreement, they should discuss everything in party forums or cabinet and not outside,” the President has said.
After his stern speech, some senior ministers, who were expected to challenge the President, have gone silent.
Sri Lanka, the only upper-middle income country in South Asia, is going through its worst economic crisis in decades. Covid-induced back-to-back lockdowns over the past two years have ravaged the thriving economy, pushing at least a million people into poverty. The President’s irrational decision to go organic overnight has also caused huge damage to the agriculture sector, turning farmers against the government. A complete ban on the use of chemicals and chemical fertilizers has destroyed crops across the island nation, raising fears of severe drought and food shortages over the next few months.
However, the President has refused to reconsider his decree and there is no clarity on the burning issue.
Tourism, one of the top foreign exchange earners and job creators, has been ruined by the pandemic. Tourism alone employs over 3 million people and generates $4-5 billion every year. Fears of a third wave hit the sector, which was showing signs of recovery in the past three months.
Since foreign reserves are at an all-time low, the government has imposed severe restrictions on imports. Sri Lanka imports most of its essential and non-essential items. Departmental stores have rationed rice, sugar, flour, pulses, milk powder etc across the country as they do not have foreign exchange for imports. The island country is also facing acute shortage of LPG.
According to the Central Bank of Sri Lanka (CBSL), the foreign reserves are just $1.5 billion as against $5-6 billion two years ago. Desperate for money, Sri Lanka is in talks with both India and China for immediate relief. According to insiders, it is expected to exceed $3 billion by the end of January.
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Sri Lanka’s foreign debt is rising and if it does not get any financial support from India or China, it can also default on loan repayment. It has to clear its dues of $5 billion in the next 2-3 months. With no US dollars left, Sri Lanka has decided to pay its Iranian oil import bills in the form of tea.
“Sri Lanka has to pay about $259 million to Iran for oil. Since we do not have any dollars, we have decided to export tea. This is some kind of barter with Iran. It is not going to violate any UN sanctions on Iran,” said a top bureaucrat.
The almost import-based automobile sector has suffered a major setback. Since it cannot import vehicles, the demand for used vehicles is increasing across the country. The home appliances market is witnessing a similar scenario.
Finance Minister Basil Rajapakse is due to visit India next week to finalize the financial aid package for his country. The Chinese Foreign Minister is also scheduled to visit Sri Lanka in a week.
There is also talk that Prime Minister Mahinda Rajapaksa, who is reportedly ailing, is resigning to make way for Tulsi. However, the PMO in a statement dismissed these reports as mere rumours.
Opposition parties have demanded that the Rajapaksa administration either bring the economy back on track or leave it. The ruling SLPP has described it as an overreaction to the global recession and economic crisis caused by the pandemic.
In the meantime, lay people hope that the island nation will not collapse.
“We have seen much worse in the past. We bounced back. We will bounce back once again. We are a resilient nation,” said Nishant, a Colombo-based businessman.
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