Sri Lanka’s economy ‘completely collapsed’, says PM

“Our economy has completely collapsed,” Wickremesinghe told Sri Lanka’s parliament. He said the government is seeking help from its global partners and the International Monetary Fund (IMF) to stabilize the economy.

But Wickremesinghe warned the island nation of 22 million people was facing a much more dire situation than the shortage.

Sri Lanka is in the middle of Worst financial crisis in seven decadesThis followed a record fall in its foreign exchange reserves, with the dollar exhausted to pay for essential imports including food, medicine and fuel.
In recent weeks, the government has taken drastic measures to deal with the crisis, including Implementing a four-day work week For public sector workers to give them time to grow their crops. However, the measures are doing little to ease the conflicts being faced by many in the country.

In several major cities, including the commercial capital Colombo, hundreds of people queue for hours to buy fuel, sometimes clashing with police and the military as they wait.

The frequency of trains has decreased, forcing passengers to sit in coaches and even precariously sit on top of them when they go to work.

Patients are unable to go to hospitals due to lack of fuel and food prices are rising. Rice, in the South Asian nation, has disappeared from the shelves in many stores and supermarkets.

According to police officials, 11 people standing in queues for fuel have died this week alone.

Wickremesinghe, who forced his predecessor Mahinda Rajapaksa to resign after violent protests, in his remarks on Wednesday, blamed the previous government for the situation in the country.

“Reviving a country with a completely collapsed economy is no easy task, especially one that is dangerously low on foreign reserves,” he said. “If steps had been taken to slow the collapse of the economy at least initially, we would not be facing this difficult situation today.”

Last week, Sri Lanka’s Minister of Power and Energy told reporters that the country had only Fuel stock for last five days.
Protesters are demanding the release of protesters who blocked the entrance to Sri Lanka's presidential secretariat amid the country's economic crisis, in Colombo on June 20.
Sri Lanka has been mainly dependent on neighboring countries India To keep it afloat — it has received $4 billion in credit lines — but even that may not be enough, Wickremesinghe said.

“We have requested more credit support from our Indian counterparts. But India too will not be able to support us like this consistently,” he said.

The next step, he said, was to strike an agreement with the IMF.

“This is our only option. We should take this route. Our aim is to discuss with the IMF and reach an agreement to get additional credit facility,” Wickremesinghe said.

Sri Lanka only has enough fuel for five days, says minister

He said Sri Lanka is currently in talks with the World Bank, the Asian Development Bank and the United States to “secure an interim short-term loan” until it receives IMF support.

He said a team of representatives of the US Treasury Department would reach Sri Lanka next week.

In addition, Sri Lanka will seek aid from China and Japan – its two “main lending countries,” Wickremesinghe said.

“If we get IMF approval, the world will trust us once again,” he said. “It will help us to get loan assistance as well as low interest loans from other countries of the world.”