The debt repayment crisis - EDITORIAL

Lanka has had an unblemished record of external debt repayment since independence in 1948. That’s a thing of the past now. Four days ago (12 April), just prior to the country shutting down to mark the Sinhala and Tamil New Year, government announced it was suspending repayment of its foreign debt (aprox. US$ 51 billion), including bonds and government-to-government borrowings, until it worked out a loan restructing programme in collaboration with the International Monetary Fund (IMF). At the same time, the country’s foreign reserves have dropped to a few million US$!  

For the past months we Sri Lankans, have had to face daily power cuts. Young and old, sick or healthy citizens have been forced to stand in winding queues to purchase precious fuel and cooking gas requirements. At least five persons are known to have died while standing in the blazing heat to purchase these precious items.   

We have been enduring food, fuel, medical and shortages of other basic requirements. We are being warned of future hikes in the costs of electricity and water. To make matters worse, the president’s mishandling of fertiliser imports, has resulted in crop damage, impoverishment of the peasantry and brought the farming community out of the fields and onto the streets.  

The shortage of foreign reserves has led to government’s inability to import sufficient stocks of paper resulting in students not being able to sit for their exams due to a shortage of paper!   
At the same time wages have remained stagnant since the outbreak of the pandemic in 2020. In the mercantile sector a number of companies reduced wages of workers by as much as 50%, while a few other companies made numbers of workers redundant. Costs of travel have risen by nearly 40% and even government hospitals are running out of stocks of medicines.  

It is no wonder therefore, that masses of citizens be they from the slums of Colombo, to the farmers in villages -one and all- have taken to the streets in every nook and cranny of the country demanding the resignation of the president and his Cabinet.  

Adding to government’s failures the regime has yet to publish in full, the reports of various Commission’s of Inquiry into the terrorist attacks of the 21 April 2019 (Easter Sunday), leading to widespread belief that government is sheilding some of the perpetrators.  

In turn it has led to the Catholic Church, initially demanding justice for the victims of the bombing. Government’s apparent intransigence has brought it (government) into conflict with the Church.  
Today media reports the Church has officially declared its opposition to the current regime.  
The call of all protesters is, for the president to resign.. ‘Gota go back to the US’ is now the common call from all sectors of society. However it is questionable as to whether religious bodies should echo such demands -as it leaves no room for negotiation.  

Meanwhile protesters remain camped out at Galle Face Green surrounding the president’s office blaming him, and the Rajapaksa family for what they see as wasteful expenditure on projects which have brought in hardly any return. Examples cited by protesters are heavy borrowings for the port at Hambantota which has now been handed over to the Chinese (on long-term lease) as repayment for unpaid debts.  

Sadly, former president Mahinda Rajapaksa seems to be losing his touch with the people. Addressing the nation earlier this month, premier Rajapaksa put forward no plan to ease the people’s burdens. He made reference to his brother (president) and the Cabinet spending every minute of their time to rebuild the country and categorically refused to yield power.  

Parliament/parliamentarians have failed to reach consensus despite around 40 governing party coalition partners abandoning the regime. Today the Opposition remains as divided, and unable to provide an alternate leadership to the country.  

To all intents and purposes we have reached a stalemate, with neither side refusing to give ground and the numbers of protesters growing by the day despite the Sinhala-Tamil New Year holidays.  
Fortunately protesters have refrained from indulging in violence and remained calm. Up to date, no incidents of violence having been reported..  

However there is every danger that a single violent incident could spark a conflageration. Such situations need to be avoided at all costs.  
The ruling party is duty-bound to ensure that those among the more lawless supporters in their ranks be kept well in hand to avoid such a confrontation.