Economic crisis: the search for solutions intensifies
Efforts to restore normalcy to daily life in the country continue this week, with the government making further attempts to achieve some sustainability in fuel imports and distribution. This has become a difficult task for the authorities and the public, with the latter facing serious difficulties.
The current shortages are due to the country not being able to purchase adequate stocks of fuel that could be stored and distributed on a staggered basis. Indeed, the decrease in foreign exchange reserves and the downgrading of the credit rating have affected Sri Lanka’s position in the world fuel markets.
This situation has been further aggravated by the ongoing conflict between Russia and Ukraine. This phenomenon has affected fuel supplies worldwide, causing oil prices to escalate almost universally. The current situation in Sri Lanka makes the impact on the country even more drastic.
As a result, the distribution of fuel from service stations served by the Ceylon Petroleum Corporation (CPC) has been significantly reduced. At the time of this writing, most of the distribution is handled by stations run by the Lanka Indian Oil Corporation (LIOC), but this does not meet total demand.
This resulted in long queues near gas stations, some of them several kilometers long. This led to fuel stocks running out at one point, leaving hundreds of people who spent many hours in the queue without fuel. This led to frayed tempers and violent clashes from time to time.
Clashes at gas stations
A concern that had been brought to the attention of authorities was that State Health Service personnel, including senior doctors and nurses, had to spend hours in fuel queues instead to carry out their duties in hospitals. This is known to have compromised their services to some extent.
In order to remedy this situation, it was agreed to designate Friday as a supply day for nursing staff. The Ministry of Health has issued its employees with letters confirming their identity. However, at several service stations, healthcare staff were hampered by hostile members of the public.
Tensions also erupted between the population, the police and the armed forces called upon to control crowds at service stations. The actions of some members of the armed forces as well as the public perception that the police and armed forces are unaffected by the shortages have led to conflict.
An incident where a group of Air Force officers manhandled a member of the public and another incident where a senior army officer is seen kicking an individual have gone viral on social networks. Such incidents have led to an erosion of trust in the police and armed forces and serve no purpose.
In such a context, the Bar Association of Sri Lanka (BASL) has also filed a fundamental rights (FR) petition seeking orders directing the Cabinet to implement policies aimed at providing uninterrupted access to goods and services. essentials, including LPG, fuel, electricity, powdered milk. , medicine and food.
The BASL said it was forced to appear before the Court because of the severe shortages of essential goods and services considered vital to the citizens of the country for whom the Constitution guarantees the fundamental right to equality, equal protection of the law and the right to life.
A three-judge bench of the Supreme Court comprising Justices Vijith Malalgoda, Mahinda Samayawardena and Arjuna Obeysekera ordered the Attorney General (AG) to formulate a plan regarding fuel distribution, identifying areas that should be prioritized for fuel distribution .
Other efforts to secure sufficient supplies of fuel are also being pursued by the government. Education Minister Susil Premajayantha, tasked with exploring the possibility of buying fuel from Russia, said it was continuing, after high-level talks between the two countries.
“Many, including parliamentarians, wonder why Sri Lanka will not go ahead and source fuel from Russia, but it must be determined whether the refined products from Russia meet the specifications of the CPC,” Minister Premajayantha told Parliament on Monday.
Also on Monday, Energy and Energy Minister Kanchana Wijesekera addressed a press conference to outline plans for several fuel shipments to arrive in the near future. Minister Wijesekera said he believed CPC petrol stations will be able to dispense fuel under certain restrictions from July 10.
A ship carrying 40,000 tonnes of diesel will arrive in Sri Lanka on July 8 or 9 and the PCC can distribute fuel from the 10th, he said. Two more ships with diesel will arrive by mid-July and a ship with gasoline for the LIOC will arrive at the end of July, the minister said.
IMF Delegation in Colombo
In a statement to Parliament on Tuesday, Prime Minister Ranil Wickremesinghe provided details of discussions the government has had with the International Monetary Fund (IMF). A high-level IMF delegation recently visited Colombo for preliminary talks on the economic crisis in Sri Lanka.
“Our country has already had talks with the IMF. In the past, we have had discussions as developing countries. However, we are now participating in the negotiations as a bankrupt country. Therefore, we have to face a more complicated process,” explained the Prime Minister.
“We need to submit a debt sustainability plan to the IMF. Only when they are satisfied with this plan can we come to an agreement at staff level. The next step is to submit the debt restructuring and sustainability plan which is being prepared by experts,” the Prime Minister revealed.
“We need to stabilize the rupee as soon as possible. In 2023 we will have to print money but by the end of 2024 we intend to stop printing money altogether. We aim to reduce the inflation rate to between 4 and 6% by 2025,” said the prime minister, who is also finance minister.
Responding to Janatha Vimukthi Peramuna (JVP) leader Anura Kumara Dissanayake’s claim that he could revive the economy in just six months, Prime Minister Wickremesinghe said he would step down if possible. Dissanayake can present his plan to the president or parliament, the prime minister said.
“No country in the world has revived an economy with negative economic growth in just six months. That would be a Nobel Prize-winning endeavor,” the prime minister said. Dissanayake responded, saying his proposals would ease the acute difficulties in six months.
The President attends Parliament
One of the features of Tuesday’s sessions in Parliament was the presence of President Gotabaya Rajapaksa in the Chamber. The president attended the sittings smiling for some time, even as opposition MPs chanted slogans against him. Former Prime Minister Mahinda Rajapaksa was also present in Parliament.
Meanwhile, the President has also reappointed a Cabinet sub-committee to review the cost of living (CoL). It includes Prime Minister Wickremesinghe and Ministers Douglas Devananda, Dr Bandula Gunawardena, Mahinda Amaraweera, Dr Ramesh Pathirana, Kanchana Wijesekera and Nalin Fernando.
The government is also keen to pursue constitutional reforms in the form of the 22nd Amendment to the Constitution. The 21st Amendment, proposed by the Samagi Jana Balavegaya (SJB) will not take place as the Supreme Court ruled that many of its provisions require public approval in a referendum.
“The Supreme Court has determined that the amendment presented by the SJB includes 69 clauses covering eight subjects which cannot be approved without a referendum. Thanks to the bill we have introduced, we are avoiding a referendum,” said Minister of Justice Dr. Wijeyadasa Rajapakshe.
The proposed 22nd Amendment restores the Constitutional Council (CC) which will be empowered to approve appointments to key positions in government and the judiciary. It will also bring back the clause preventing dual nationality from standing for election, explained the Minister of Justice.
A feature of the proposed amendment is the provision allowing the Commission for the Investigation of Bribery or Corruption (CIABOC) to initiate investigations itself. These powers were repealed in the 20th Amendment. This provision shall take effect immediately after the adoption of the amendment by Parliament.
The government still needs a two-thirds majority, or 150 votes, to pass the 22nd Amendment proposed to Parliament. Although he was able to pass the 20th Amendment by comfortably securing 156 votes, in recent months a significant number of his lawmakers have decided to sit as “independents.”
Some of them have said they would not support the 22nd Amendment in its current form because it does not sufficiently diminish the powers enjoyed by the executive chairman. Others, like MP Patali Champika Ranawaka, said efforts should be made to approve it with relevant amendments.
It should be noted that the 22nd Amendment came about as a result of recent opposition demands to reduce the powers of the executive chairman. It will therefore be difficult for the opposition not to support it now. The public is not likely to view such a position very favorably.
These economic and political developments dominated the week that ended. The same will follow this week with the government seeking solutions to achieve stability and restore normality that would alleviate the distress experienced by millions across the country.