A Sri Lankan government minister was in Qatar on Tuesday and another will travel to Russia over the weekend to seek energy deals to address a severe fuel shortage that is crippling the island nation’s economy and closing several schools. is forcing.
The South Asian country of 22 million people is in the grip of a financial crisis that has depleted currency reserves dangerously, making imports of essential goods including food, medicine, petrol and diesel difficult.
Protests, some of them violent, have erupted in recent months and leading ministers have resigned, leaving President Gotabaya Rajapaksa and Prime Minister Ranil Wickremesinghe fighting to stabilize the nation.
In a move aimed at bringing more fuel to Sri Lanka, the power and energy minister said on Tuesday that the monopoly controlling imports would be ended and companies from oil-producing countries would be allowed to enter the market.
The cabinet decision came as the minister, Kanchana Wijesekera, was leading Qatar and a ministerial aide were scheduled to visit Russia on Sunday.
The government is also in talks with the International Monetary Fund (IMF) on a loan package, and has invited major partners India, China and Japan to a donor conference to add billions of dollars to the already promised aid.
In the data released on Tuesday, the damage done to the economy by this crisis has been underlined.
Sri Lanka’s economy shrank 1.6 per cent from January to March compared to the same period in 2021, and analysts said high inflation and political uncertainty could lead to a contraction of up to 5 per cent in the second quarter.
The turmoil resulted from the confluence of the Covid-19 pandemic with the country’s lucrative tourism industry and remittances of foreign workers, mistimed tax cuts by Rajapaksa that drained the exchequer, and soaring oil prices.
The government closed urban schools for almost two weeks from Tuesday and only allowed fuel supply for essential services like health, trains and buses as stocks would last only for a week or so depending on regular demand. A government spokesman said on Monday that people have been encouraged to work from home.
Common people are increasingly looking for opportunities to leave the country and find a new life abroad.
Demand for passports has mounted, and the Navy said it had detained 47 people, including seven children, off the west coast late Monday as they attempted to immigrate to Australia illegally.
More than 120 people trying to leave the country in small boats have been stopped in the past two weeks.
Wijesekera flew to Qatar late on Monday, while education Minister Sushil Premjayant will reach Russia on July 3.
Wijesekera hopes to find a long-term fuel supplier in Qatar that is “ready to deal with Sri Lanka’s foreign exchange and other challenges”, said a ministry official, who was not authorized to speak to the media. refused to be recognized.
Rajapaksa said on Twitter that he met with Russian Ambassador Yuri Materia on Monday. Sri Lanka bought 90,000 tonnes of Russian oil last month.
“The focus on developing business opportunities as well as maintaining the strong bilateral ties between our two countries was widely discussed in this meeting,” Rajapaksa said.
Traffic was light on Tuesday in the main city of Colombo, with schools closed and most public and private sector workers working from home.
But buses and trains were running and shops were open for groceries and other essentials.
The government said Sri Lanka would cultivate 250,000 hectares (617,763 acres) of unused land belonging to religious institutions, including temples, churches and mosques, in the coming months to help address food shortages.
Sri Lanka faces the prospect of running out of staples, especially rice, partly due to a drop in production due to a ban on chemical fertilisers last year, which has now been reversed.
Wickremesinghe told parliament this month that Sri Lanka needed about $5 billion to pay for imports, including fuel, fertilizers and food.
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