“Our economy is facing a complete collapse,” Vikremesinghe told Sri Lanka’s parliament, adding that the government was seeking help from its global partners and the International Monetary Fund (IMF) to stabilize the economy.
But Wickremesinghe warned that the 22 million island nation is “facing a much more serious situation” beyond the shortage.
Sri Lanka is in the midst of its worst financial crisis in seven decades, as its foreign exchange reserves fell to record lows, with dollars running out to pay for major imports, including food, medicine and fuel. In recent weeks, the government has taken drastic measures to tackle the crisis, including introducing a four-day work week for public sector workers to give them time to grow their own crops. However, the measures do little to alleviate the struggles facing many people in the country.
In several major cities, including the commercial capital of Colombo, hundreds continue to line up for hours to buy fuel, sometimes clashing with police and the military while they wait.
The frequency of trains has been reduced, forcing passengers to squeeze into compartments and even sit unsteadily on them as they travel to work.
Patients are unable to travel to hospitals due to fuel shortages and food prices are rising. Rice, a staple of the South Asian nation, has disappeared from shelves in many stores and supermarkets.
This week alone, 11 people have been waiting in line for fuel, police said.
Wikremesinghe, who took office days after violent protests forced his predecessor, Mahinda Rajapaksa, to resign, appears to have blamed the previous government for the situation in the country in comments Wednesday.
“It is not an easy task to revive a country with a completely collapsing economy, especially one with dangerously low foreign exchange reserves,” he said. “If at least steps had been taken to slow down the collapse of the economy in the beginning, we would not be facing this difficult situation today.
Last week, Sri Lanka’s energy and energy minister told reporters that the country had only enough fuel for five days. Sri Lanka relies heavily on neighboring India to stay afloat – it has received $ 4 billion in credit lines – but Wickremesinghe said that may not be enough.
“We have asked for more borrowing from our Indian counterparts. But even India will not be able to support us in this way all the time,” he said.
The next step, he said, is to conclude a deal with the IMF.
“This is our only option. We must take this path. Our goal is to hold discussions with the IMF and reach an agreement on obtaining additional credit facilities,” Vikremesinghe said.
He added that Sri Lanka is currently in talks with the World Bank, the Asian Development Bank and the United States to “provide temporary short-term loans” until it receives IMF support.
A team of US Treasury Department officials will arrive in Sri Lanka next week, he said.
In addition, Sri Lanka will seek help from China and Japan, two of its “major creditor countries,” Wikremesinghe added.
“If we get the stamp of IMF approval, the world will trust us again,” he said. “This will help us provide loan assistance as well as low-interest loans from other countries around the world.”
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