The demands for President Gotabaya to step down are still vociferous but there seems to be a gradual realisation among the political class that the country desperately needs a contingent action plan on the economy front first.

A faint glimmer of hope for some order is slowly emerging amid the chaos that has engulfed Sri Lanka. The lifting of the state of emergency by Ranil Wick mesinghe shows that he’s in control of the besieged nation’s affairs.

This should offer a measure of comfort for India as Sri Lanka was seen as drifting towards China under the leadership of the Rajapaksas. The proposed 21st amendment to the Constitution, aimed at curbing the unfettered powers of President Gotabaya Rajapaksa, was presented to the Cabinet this Monday. Prime Minister Wickremesinghe sensibly decided it should be studied by all parties.

Two lawmakers from the principal opposition party, the Samagi Jana Balawegaya (SJB), broke ranks last week to join the new Government led by Wickremesinghe, the five-term Prime Minister and perhaps the only politician with the bandwidth and maturity to steer the island nation towards any semblance of stability from its current sorry state.

The demands for President Gotabaya to step down are still vociferous but there seems to be a gradual realisation among the political class that the country desperately needs a contingent action plan on the economy front first. To either impeach a President who led his party to a two-third majority or to oust him through a no trust vote would entail long drawn out processes; in the interim, essential supplies, fuel and food shortages can hardly be left unaddressed.

Wickremesinghe has the experience and acceptability, most notably with the international community, the IMF, the World Bank and the neighbouring countries, particularly India. He seems to have hit the ground running. In his first address to the nation, the five-term PM came out with a set of proposals for economic revival including a new alternative budget, privatisation of the loss-making national carrier Sri Lankan Airlines, and printing more money to pay state sector employees.

While India has transferred aid in terms of fuel (40,000 tonnes each of petrol and diesel) rice, medicines and milk powder, it can also play a role in the negotiations with multilateral agencies.

There is popular anger in the island nation against China and its debt-trap diplomacy, which has led to assets such as the Hambantota port virtually becoming its own piece of land in that country – this has converged with anger against the Rajapaksas. China ‘holds more than 10 per cent of the over $50-billion debt owed by Sri Lanka, which is a conservative estimate.

Meanwhile, the Lankan Cabinet has approved seeking a $500-million loan from Exim Bank of India. It has already received $500 million from Exim Bank and another $200 million from State Bank of India. Sri Lanka’s central bank has imposed trade credit restrictions on exports to bolster its forex reserves – now at barely $2 billion, while its debt obligations this year are estimated at $8.6 billion.

Its foreign debt is about 60 per cent of its GDP, while inflation arising out of shortages rages at 40 per cent. India should do everything it can to bail Sri Lanka out of its crisis. A reset away from Chinese dependence would work to the benefit of India and Sri Lanka. In Wickremesinghe, India has an ally

Courtesy:Business Line