December 8, 2023

COLOMBO, Sri Lanka — Sri Lanka will resume bailout talks with the International Monetary Fund (IMF) in August, its new president said Wednesday, as he called on lawmakers to form an all-party government to resolve a crippling financial crisis. .

In a speech to Parliament, President Ranil Wickremesinghe said constitutional amendments were needed to limit presidential powers – indicating he would satisfy a key demand of protesters who ousted his predecessor, Gotabaya Rajapaksa.

“The president of a country does not need to be a king or a god who rises above the people. He or she is one of the citizens,” Wickremesinghe said.

The island nation of 22 million is facing its worst economic crisis since independence from Britain in 1948, with foreign reserves at record lows and an economy hit by the coronavirus pandemic and a sharp drop in government revenue. .

Angered by persistent shortages of essentials, including fuel and medicine, and inflation soaring more than 60 percent year-on-year, hundreds of thousands of people took to the streets in early July, forcing Rajapaksa first to flee the country and then leave office.

Wickremesinghe, who was prime minister at the time, took over as president and was later confirmed in his post by Parliament.

Talks with the IMF on a four-year program that could provide up to $3 billion will resume in August, Wickremesinghe told lawmakers in his first major speech to Parliament since taking office.

The government is working with financial and legal advisers Lazard and Clifford Chance to finalize a plan to restructure overseas debt, including about $12 billion owed to bondholders.

Wickremesinghe said his government is working on a long-term economic plan.Ishara S. Kodikara / AFP – Getty Images

“We will submit this plan to the International Monetary Fund in the near future and negotiate with the countries that provided loan assistance,” Wickremesinghe said.

“Next, negotiations with private creditors will also begin to reach consensus.”

A veteran lawmaker whose party held just one seat in Parliament, Wickremesinghe won a leadership vote in the 225-member house last month with the support of the country’s ruling party, which is dominated by the Rajapaksa family.

But the new president repeated his call for a unity government, adding that he had already started talks with some groups.

“I respectfully extend the hand of friendship to all of you. I confidently invite you to put aside the past and unite for the sake of the country,” Wickremesinghe said.

Opposition MP Harsa de Silva supported the president’s proposal.

“We must unite. specifically an all or multi-party government for a limited period to work towards creating this new #SriLanka on a common minimum programme,” he said on Twitter.

With an interim budget expected to be presented within weeks, Wickremesinghe said his government was working on a long-term economic plan. This will include reducing public debt from the current level of 140 percent of Sri Lanka’s GDP to less than 100 percent within 10 years and creating a fiscal surplus by 2025.

He did not give details.

Wickremesinghe, who has been accused by activists and rights groups of cracking down on anti-government protesters, said peaceful struggle was a fundamental right but he would not tolerate violence.

“I will not allow anyone to act outside the law,” he said.

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