Sri Lankan PM asks for patience as UN asks for relief funds

COLOMBO, Sri Lanka (AP) — Sri Lanka’s prime minister said Tuesday that the United Nations has organized a global appeal to help the island nation deal with critical shortages of food, fuel and medicine, but the funds provided barely scratch the surface of $6. billion it needs to stay afloat over the next six months.

In a speech to parliament, Prime Minister Ranil Wickremesinghe said the UN was seeking to provide $48 million in aid over a four-month period.

Wickremesinghe said it would be difficult over the next three weeks to get some essentials and urged people to be united and patient, to use scarce supplies as carefully as possible and to avoid non-essential travel.

“Therefore, I urge all citizens to refrain from thinking about hoarding fuel and gas during this time. After these difficult three weeks, we will try to deliver fuel and food without further disruption. Negotiations are ongoing with various parties to ensure this happens,” Wickremesinghe said.

Sri Lanka is on the verge of bankruptcy, having suspended the repayment of its foreign loans. Its foreign exchange reserves are nearly depleted, which has limited imports and caused severe shortages of essential items, including food, medicine, fuel and cooking gas.

It must repay $7 billion this year of the $25 billion in foreign loans it must repay by 2026. Sri Lanka’s total external debt is $51 billion.

Authorities have started talks with the International Monetary Fund for a bailout, and Wickremesinghe said he has asked the IMF to lead a conference to unite Sri Lanka’s lenders.

“Holding such a conference under the leadership of India, China and Japan will be a great strength for our country. China and Japan have different credit approaches. We hope that some consensus on lending approaches can be reached through such a conference,” Wickremesinghe said.

A decision last year to ban imported agrochemicals and make farming completely organic cut rice production in half during the main growing season, although the ban has since been lifted. Lack of funds to purchase fertilizers also threatens future yields, raising fears of a worsening food crisis.

Wickremesinghe said chemical fertilizer imports cost $600 million a year and $150 million would be needed to import food each month. Another billion dollars will be needed to bolster the local currency, and in total Sri Lanka will need around $6 billion to stay afloat for the next six months, he said.

“The task of rebuilding our declining agriculture must begin immediately. We are losing the international market for our export crops. Measures must be taken to prevent this. Chemical fertilizers are needed to boost local agriculture,” he said.

Wickremesinghe said that before taking office as prime minister last month, the government alienated Sri Lanka’s longtime allies.

“Japan is our long-time friend. A nation that has helped our country a lot. But they are now unhappy with us because of the unfortunate events of the past,” Wickremenshinghe said. “Our country has not officially informed Japan of the suspension of certain projects. Sometimes the reasons for these suspensions were not even specified.

Sri Lanka has canceled and reinstated a port development project with India and Japan several times in the years since their initial 2019 deal.

“Despite the alienation of these friendly nations, India has offered to assist us in the face of the growing crisis. We express our respect and gratitude to them at this difficult time. We are also working to restore old friendships with Japan,” did he declare.

India has provided billions of dollars in aid to Sri Lanka in the form of loans and lines of credit since the crisis began.

Sri Lanka’s Foreign Employment Minister Manusha Nanayakkara said the government plans to send some of its bloated public workforce to work overseas to earn much-needed foreign currency. He said the Department of Health is also developing laws to help state health workers seek overseas jobs.

Remittances from foreign workers have been one of Sri Lanka’s main economic arteries, along with garment exports and tourism, but these revenues have declined significantly because the authorities have artificially maintained the value of the US dollar and made mandatory conversion of foreign money into local currency, which has led many people to use illegal channels to transfer funds.

Nanayakkara said Sri Lanka typically receives $700 million a month in remittances from expatriate workers, but that figure fell to $230 million in March.

The economic crisis has led to political unrest. Protesters have been camping for more than 50 days in front of the president’s office to demand the resignation of President Gotabaya Rajapaksa, whom they accuse of being responsible for the crisis.

The protests have nearly dismantled the once-powerful Rajapaksa political dynasty, with the president’s brother resigning as prime minister last month amid violent protests. Three other family members resigned from their cabinet posts earlier this year.

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