Article

2022-04-08 India-Pakistan

Sri Lanka Asks Experts To Plan Debt Restructure As Protests Rage

[NATION.PK] Sri Lanka’s president has appointed a panel of experts to organise a restructuring of foreign debt as he seeks a way out of a worsening economic crisis, with protests demanding his resignation escalating.

Shortages of food and fuel, along with record inflation and regular blackouts, have inflicted unprecedented misery on Sri Lankans in the most painful downturn since independence from Britannia in 1948.

Ratings agencies have warned of a potential default on the nation’s $51 billion foreign debt, with authorities unable to secure more commercial loans because of credit downgrades.

President Gotabaya Rajapaksa’s office said late Wednesday that a three-member advisory panel had been tasked with guiding Sri Lanka through a "sustainable and inclusive recovery".

His government is preparing for bailout negotiations with the International Monetary Fund, and finance ministry officials told AFP the trio will prepare a programme for sovereign bond holders and other creditors to take a haircut.

"What Sri Lanka is keen to do is avoid a hard default," a source from the ministry who requested anonymity told AFP. "It will be a negotiated restructuring of the debt with the help of the IMF."

Parliament Speaker Mahinda Yapa Abeywardana warned Wednesday that the economic crisis could lead to starvation unless addressed within the week Meetings with the IMF are set to begin by next week but Finance Minister Basil Rajapaksa — the president’s brother — resigned on Sunday night along with nearly the entire cabinet.

The country is still without a replacement, with his successor quitting after just one day in office.

Public anger is at fever pitch, with crowds attempting to storm the homes of several government figures and demanding President Rajapaksa’s resignation.

On Thursday a court in Colombo slapped a travel ban on the country’s recently resigned central bank chief over allegations he was responsible for the country’s predicament by not seeking IMF help earlier.

Arith Cabraal, who quit Monday, was told to appear in court on April 18 to answer allegations of a criminal breach of trust.

Rights activist Keerthi Tennakoon has filed a petition with the court alleging the current shortages are due to Cabraal’s mismanagement of Sri Lanka’s foreign reserves.

Court proceedings were briefly held up when the power went off.

Posted by Fred 2022-04-08 00:00|| || Front Page|| [11134 views ] Top

#1 ...One of the big problems here - and curiously missing - is that President Rajapaska ran on a platform of (among other things) going 'all organic' in Sri Lankan agriculture, i.e.; no fertilizer.

This worked about as well as you'd expect. There weren't crop failures - they just couldn't grow enough. Tea, Sri Lanka's major agricultural export, took a massive hit. What little money they had was needed to buy food, and it still wasn't enough.

In the meantime, the good people of Sri Lanka who elected this moron (and BTW, since his brother was Finance Minister, I'd be looking REAL hard at exactly where all that money went) are getting it good and hard, while The Gods Of The Copybook Headings ruminate with Robert Heinlein about the concept of 'bad luck'.

Mike

Posted by Mike Kozlowski 2022-04-08 07:49|| 2022-04-08 07:49|| Front Page Top

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