COLOMBO: Sri Lanka’s president on Friday agreed to replace his older brother as prime minister in a proposed interim government to solve a political crisis caused by the country’s worst economic crisis.
“President Gotabaya Rajapaksa agreed that a national council will be appointed to name a new prime minister and Cabinet comprised of all parties in Parliament,” lawmaker Maithripala Sirisena said after meeting with the president.
Sirisena was a governing party lawmaker before defecting earlier this month along with nearly 40 other legislators. Protesters who have crowded the streets since March hold them responsible for the crisis.
Sri Lanka is facing one of its worst economic crises resulting in widespread protests against the Rajapaksa family leaders, including President Gotabaya Rajapaksa and PM Mahinda Rajapaksa.
Huge piles of foreign debt, series of lockdowns, soaring inflation, shortage in fuel supply, fall in foreign currency reserves and devaluation of currency has adversely impacted the country’s economic growth.
The country has to repay $7 billion in foreign debt this year, and $25 billion by 2026. Its foreign reserves stand at less than $1 billion.
Sri Lanka’s economy was in trouble even before the Covid pandemic struck. The lockdowns further added to its woes and impacted the informal sector hard, which accounts for nearly 60 per cent of the country’s workforce.
The country’s foreign exchange reserves have fallen 70 per cent in the past two years to about $2.31 billion, leaving it struggling to pay for essential imports, including food and fuel.
The financial crisis also stemmed from a critical shortfall in foreign currency, leaving traders unable to finance imports.
Tourism, one of the key source of foreign exchange for the country, was badly hit due to the Covid pandemic. Besides, remittances from Sri Lankans working overseas also declined sharply.
(With inputs from agencies)