Sri Lanka appoints advisory committee to deal with worsening debt crisis

Sri Lanka appoints advisory committee to deal with worsening debt crisis

The Sri Lankan government has appointed an advisory committee of leading economic and fiscal experts to advise on how to deal with the current debt crisis and engage with the IMF and other lenders as the island nation is struggling to tackle the unprecedented shortage of foreign exchange reserves.

The Presidential Advisory Group on Multilateral Engagement and Debt Sustainability includes Indrajit Coomaraswamy, former governor of the Central Bank of Sri Lanka and former director of the Economic Affairs Division of the Commonwealth Secretariat, according to a statement released by the Division on Wednesday. of the President’s media.

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The other members are Shanta Devarajan, professor of development practice, Georgetown University and former chief economist of the World Bank; and Sharmini Coorey, former director of the IMF Institute’s Capacity Development Institute and former deputy director of the IMF’s African Department.

“Among the responsibilities that the Presidential Advisory Group will assume is to engage in discussions with relevant Sri Lankan institutions and officials working with the IMF, and to provide guidance that will resolve the current crisis of the debt and lead to a sustainable and inclusive recovery for Sri Lanka,” the statement said.

Meanwhile, the president’s office announced on Thursday that Nandalal Weerasinghe has been appointed governor of the Central Bank of Sri Lanka, replacing Ajith Nivard Cabraal, who stepped down earlier this week just seven months after taking office in September 2021.

KMM Siriwardena has been appointed Treasury Secretary, replacing SR Attygalle.

Rajapaksa has yet to appoint a new finance minister. The country’s Finance Minister Ali Sabry resigned on Tuesday, a day after President Gotabaya Rajapaksa appointed him after sacking his brother Basil Rajapaksa amid the island nation’s worst economic crisis.

Basil Rajapaksa was fired when he planned to travel to Washington to conduct negotiations with the International Monetary Fund (IMF).

A government parliamentary group met with Prime Minister Mahinda Rajapaksa on Wednesday to discuss urgent steps to improve the situation so that citizens no longer need to queue for fuel, gas and basic necessities, Shehan Semasinghe, Minister of State, mentioned.

He claimed that the government did not lose its parliamentary majority although 42 of its members said they would remain independent from the ruling SLPP coalition in parliament.

“Our majority is solid,” Semasinghe said. Speaking in Parliament on Wednesday, Chief Government Whip Johnston Fernando said the government would face this problem and there was no reason for President Gotabaya Rajapaksa to step down as he was elected.

“As a responsible government, we declare that President Gotabaya Rajapaksa will not resign from office under any circumstances,” Fernando said.

Sri Lankans have been protesting long power cuts and shortages of gas, food and other basics for weeks. Public anger prompted nearly all cabinet ministers to resign and dozens of lawmakers to quit Rajapaksa’s government.

Police said they plan to deploy special security for key locations such as the president’s house, the presidential secretariat, the prime minister’s residence-office and parliament, given the growing public protests against the worst country’s economic crisis.

Sri Lanka is facing its worst economic crisis since its independence from the United Kingdom in 1948. An Indian line of credit under a special economic aid program provided only a temporary solution.

India had recently announced a $1 billion line of credit to Sri Lanka as part of its financial assistance to the country to tackle the economic crisis after a previous $500 billion line of credit. in February to help him buy petroleum products.

The Indian High Commission announced on Wednesday the arrival of two more fuel shipments in Colombo under the Indian Line of Credit.

“The total supply of various types of fuel under Indian assistance now stands at over 270,000 MT,” he said.

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Robert P. Matthews