Lanka Appoints Advisory Panel, To Help Resolve Growing Debt Crisis, Engage With IMF

The Sri Lankan government has appointed an advisory committee comprising eminent economic and fiscal experts to provide guidance on addressing the current debt crisis and engaging with the IMF and other lenders as the country struggles to combat the unprecedented shortage of foreign 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 issued by the President Media Division on Wednesday.

The other members are Shanta Devarajan, Professor of the Practice of Development, Georgetown University and former chief economist of World Bank; and Sharmini Coorey, former director of the Institute of Capacity Development of the IMF Institute, and former deputy director of the Africa Department, IMF. "Among the responsibilities that the Presidential Advisory Group will undertake are to engage in discussions with relevant Sri Lankan institutions and officials engaging with the IMF, and to provide guidance that will address the present debt crisis and lead towards sustainable and inclusive recovery for Sri Lanka," the statement said. Rajapaksa is yet to appoint a new minister of finance.

The country's Finance Minister Ali Sabry on Tuesday resigned, a day after President Gotabaya Rajapaksa appointed him after sacking his brother Basil Rajapaksa amidst the island nation's worst economic crisis. Basil Rajapaksa was fired as he was planning to visit Washington to hold negotiations with the International Monetary Fund (IMF). A government parliamentary group met with Prime Minister Mahinda Rajapaksa on Wednesday to discuss urgent steps that must be taken to improve the situation so that citizens would no longer need to stand in long queues for fuel, gas and essentials, Shehan Semasinghe, a state minister, said. He asserted that the government has not lost its parliamentary majority despite 42 of its members saying they would remain independent of 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 will face this problem and there is no reason for President Gotabaya Rajapaksa to resign as he was elected to office. "As a responsible Government, we state that President Gotabaya Rajapaksa will not resign from his post under any circumstances," Fernando said. Sri Lankans have protested for weeks over lengthy power cuts and shortages of gas, food and other basic goods. The public anger has prompted nearly all Cabinet ministers to quit, and scores of lawmakers to leave Rajapaksa's government.

Meanwhile, police said they are planning to deploy a special security arrangement for key locations such as the President's House, Presidential Secretariat, Prime minister's residence-cum-office and Parliament in view of the growing public protests over the country's worst economic crisis. Sri Lanka is facing its worst economic crisis since gaining independence from the UK in 1948. An Indian credit line in a special economic relief package has only provided a temporary solution.

India had recently announced to extend a USD 1 billion line of credit to Sri Lanka as part of its financial assistance to the country to deal with the economic crisis following a previous USD 500 billion line of credit in February to help it purchase petroleum products. The Indian High Commission on Wednesday announced the arrival of two more shipments of fuel to Colombo under the Indian credit line. "Total supply of various types of fuel under Indian assistance now stands at more than 270,000 MT," it said.

(PTI)