Sri Lanka Crisis: Inflation rose to 29.8% in April and food prices rose 46.6% year on year. (File)
Colombo, Sri Lanka:
Thousands of people lined up for cooking gas and petrol in Sri Lanka’s commercial capital on Friday, and Prime Minister Ranil Wickremesinghe warned of a food crisis as the island nation struggles with a devastating economic crisis.
Lines have been built in many parts of Colombo, a city of about 900,000 people, as residents try to stockpile fuel, most of which is imported and is in short supply due to the government’s running out of foreign exchange.
“About 200 cylinders were distributed despite the presence of about 500 people,” said Mohammad Shazli, a part-time driver, waiting in line for a third day to collect cooking gas for his family of five. Hundreds of other people lined up with empty cylinders beside them.
“Without gas, without kerosene oil, we can do nothing,” Shazli said. “What’s the last option? We’re dying without food. One hundred percent will happen.”
Tourism-dependent Sri Lanka, where India and China are pushing for influence, has severe shortages of foreign exchange, energy and medicine, and economic activity has slowed.
Public transport is sluggish and traffic is light because most people are staying at home due to lack of petrol.
Vikramasinghe also warned of a food crisis, promising to buy enough fertilizer for the next planting season to increase productivity and meet the food needs of its 22 million people.
In April last year, President Gotabaya Rajapaksa’s decision to ban all chemical fertilizers severely reduced crop yields, and although the government lifted the ban, no significant imports have yet been made.
“Although there may not be time to get fertilizer for this Yala (May-August) season, steps are being taken to ensure adequate stocks for the Maha (September-March) season,” the Prime Minister said in a message on Twitter late. Thursday.
“I sincerely urge everyone to accept the gravity of the situation.”
Japan, which has long-standing economic ties with the island, has said it will provide অনু 3 million in emergency aid for medicine and food, according to its foreign ministry.
When a truck brought fresh supplies to the cooking gas distribution center, soldiers with automatic rifles patrolled the car while the people in the row applauded.
State-run Litro Gas expects to start delivering 80,000 cylinders per day by Saturday, but the market needs to be shaken to fill the shortfall of an estimated 3.5 million cylinders, Chairman Bijitha Herath told Reuters.
The government has invited tenders for procurement of $ 120 million worth of cooking gas from India under a 1 billion credit line.
However, prices of cooking gas as well as food and other necessities have gone up.
The price of a 12.5-kg cooking gas cylinder rose from Rs 2,675 in April to about Rs 5,000 ($ 14).
“There’s no point in talking about how hard life is,” said Sumanavathi, a 60-year-old woman selling fruits and vegetables at Colombo’s Pettah Market. “I can’t predict what will happen in two months. At this rate, we can’t stay here.”
Inflation is expected to rise to 40% in the next few months, but is largely driven by supply-side pressures, and the central bank and government have already curbed demand-side inflation, the bank said.
Inflation was 29.8% in April and food prices rose 46.6% year on year.
Police in riot gear stormed a rally on Thursday, removing hundreds of protesters by truck. Protesters are demanding the resignation of the president as well as the prime minister.
The economic crisis has been fueled by the Covid-19 epidemic, which was overturned by President Rajapaksa and his brother Mahinda’s government, who resigned as prime minister last week, and the combination of rising oil prices and populist tax cuts.
Critics have accused Prime Minister-elect Bikram Singh of being a fanatic of the brothers, a charge he denies.
Nine new members of the cabinet, including the health, trade and tourism ministries, were appointed on Friday. However, no one has been named to head the finance ministry and lead negotiations with the International Monetary Fund for a bailout. You can hold portfolio in Vikramasinghe.
A spokesman for the IMF said it was closely monitoring developments and that a virtual mission in Sri Lanka was expected to conclude technical talks on May 24 on a possible loan program.
Group of Seven economic powers support debt relief efforts for Sri Lanka, Group Finance chiefs said Thursday in a draft statement from a meeting in Germany after Sri Lanka defaulted on its sovereign debt.
Central Bank Chief P. Nandalal Warasinghe said the advisers for debt restructuring were almost finalized and he would soon submit a proposal to the cabinet.
“We’re in pre-emptive default,” he said. “Our position is very clear. Until the debt is restructured, we will not be able to repay.”
(Except for the title, this story was not edited by NDTV staff and was published from a syndicated feed.)
