COLOMBO: Sri Lanka accepted a rice and pharmaceuticals shipment from neighboring India as the island nation battles an unprecedented economic crisis that has left supermarket shelves and pharmacy cabinets empty. A critical shortage of foreign currency has left Sri Lanka unable to pay for enough imported food, fuel and medicines to meet demand since the end of last year, causing widespread hardship.
Its 22 million people have also been forced to endure prolonged daily blackouts and galloping inflation that has strained household budgets. India has extended $1.5 billion in credit lines to allow Sri Lanka to keep meeting a portion of its food and energy needs, and Friday’s shipment followed a visit by Indian experts for aid talks. “Both parties discussed at length the future course of action of the Indian aid program to stabilize and revive the Sri Lankan economy,” Sri Lankan President Gotabaya Rajapaksa’s office said after the meeting. An acute lack of petrol has immobilized Sri Lanka this week, with parliament cancelling two days of sittings to help conserve fuel.
The United Nations last week appealed for emergency food aid after a survey showed that four out of five Sri Lankans were skipping meals to cope with the crisis. A US Treasury delegation is expected in the capital Colombo next week to assess the crisis, with Prime Minister Ranil Wickremesinghe telling lawmakers Wednesday that the nation’s economy had reached the point of “complete collapse”. Sri Lanka has already defaulted on its $51 billion foreign debt and is in bailout talks with the International Monetary Fund, which could take months.
In another development, cash-strapped Sri Lanka’s president Friday appointed the island’s biggest casino operator Dhammika Perera as Investment minister with responsibility over a Chinese-funded tax-free enclave in the impoverished South Asian nation. The 54-year-old businessman known as Sri Lanka’s “Casino King” was sworn in by President Gotabaya Rajapaksa at his sea-front residence to attract foreign capital into the country, his office said.
Perera replaced Rajapaksa’s youngest brother Basil who resigned from parliament two weeks ago as the ruling clan came under intense pressure to step down over economic mismanagement. The president has refused to step down and instead appointed opposition legislator Ranil Wickremesinghe as the new prime minister last month to salvage the economy. The president’s office said Perera’s investment ministry will have responsibilities over the $1.4 billion “Port City” land reclamation project which has been turned into a tax-free enclave in Colombo.
The United States has expressed fears that the Port City could be “a haven for money launderers and other sorts of nefarious actors.” Western countries, as well as regional power India, have long expressed concern over growing Chinese influence in strategically placed Sri Lanka. Perera will be in a cabinet with premier Wickremesinghe, who in 2015 described the Casino King as one of four top corrupt businessmen in the country supporting the Rajapaksa clan.
Perera himself has publicly pledged his admiration and loyalty to Mahinda Rajapaksa, who stepped down as prime minister on May 9 after nation-wide violent protests over shortages of essentials, including fuel. Sri Lanka is facing its worst economic crisis with the 22 million people enduring acute shortages of food, fuel and medicines for months as the government ran out of dollars to finance even the most essential imports.
Perera has claimed on his website that he has a plan to raise Sri Lanka’s GDP per capita income more than threefold from its current $3,682 to $12,000. He has said he will raise $5.0 billion in foreign currency deposits by selling 10-year resident visas to some 50,000 foreigners willing to deposit $100,000 in a local bank account, a scheme already in place since April. The country defaulted on its $51 billion foreign debt in April and is in talks with the International Monetary Fund for a possible bailout. – AFP