ASIA/SRI LANKA - Economy recovers: poverty rate remains high, population calls for new presidential elections

Colombo (Agenzia Fides) - The economic situation in Sri Lanka is beginning to recover after the two-year economic crisis that followed the default declared in April 2022 and the four-year bailout package through loans from the International Monetary Fund (IMF): the country was in debt - $83 billion - more than half of which was owed to foreign creditors. According to the IMF, inflation is now falling and the economy began to grow again in the second half of 2023, which is good news for a country where people have been suffering severe shortages of food, medicine, fuel and electricity since the beginning of 2022.
The street protests triggered by this situation had led to the ousting of then President Gotabaya Rajapaksa.
As part of the $2.9 billion bailout program, the International Monetary Fund is providing loans in tranches and checking every six months whether the country is on track with the necessary economic reforms. So far, Sri Lanka has received two payments and also secured commitments for debt relief from major creditors such as India, Japan and China. Meanwhile, the government is also in talks with private creditors.
In July 2022, former Prime Minister Ranil Wickremesinghe was appointed President (until the official end of the term in 2024), and since then, thanks to the support of international institutions, the government has managed to restore electricity and largely address shortages of essential goods. The Sri Lankan currency has strengthened and interest rates have fallen to around 10%. However, the problems of high taxation, cost of living and high unemployment due to the collapse of industrial production and declining tourism remain. According to a recent World Bank report, the poverty rate has increased for the fourth year in a row and by the end of 2023, 25.9% of the population will be living below the poverty line. Last March, the government approved a 40 percent increase in the monthly minimum wage, from 12,500 rupees (about 40 euros) to 17,500 rupees, to support workers amid rising living costs. The population is now waiting for a date for new elections as President Ranil Wickremasinghe seeks to extend his term in office. The Sri Lanka Election Commission has announced that the presidential election will be held between September 17 and October 17, but the ruling party has meanwhile expressed its intention to postpone the election and hold a referendum to extend the president's term for another two years. Civil society associations, Catholic Church organizations and other religious groups believe that the bill presented by the government "completely contrary to the aspirations and rights of the people," pointing out that the constitution guarantees the president a five-year term and that it is the right of citizens to express themselves by voting. Meanwhile, three years after the presentation of the report on the responsibility of intelligence services and politicians for the 2019 Easter attacks (bomb attacks on three churches and several hotels that killed over 250 people), President Wickremesinghe has decided to reopen the entire process and set up a new commission of inquiry, headed by a retired judge, to close the still open wound of the attacks. The commission of inquiry will investigate and clarify the actions and reactions of the intelligence services following the warning from India on the eve of the Easter Sunday 2019 attacks. According to the spokesman for the Catholic Bishops' Conference, Father Cyril Gamini Fernando, "this is an unnecessary delay: the government should simply implement the recommendations already made by the previous commission of inquiry". Five years after the tragic events of 2019, "the situation is still the same, but the Church does not give up fighting for justice," he said. (PA) (Agenzia Fides, 18/6/2024)

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poverty

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