President Ranil Wickremesinghe has informed the parliament that the government will work towards ending the country’s bankruptcy by 2026. To push the economic growth of the nation post the economic crisis citizens will have to bear high taxes for the next six months.
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Economic goals of Sri Lanka
The island nation of South Asia, Sri Lanka witnessed its worst economic crisis since its independence in 2022 and is now failing to get a bailout package from International Monetary Fund (IMF). Today the president has declared that by the end of 2023, the nation will achieve economic growth.
Ranil Wickremesinghe, President of LK told the parliament today that the country has aimed at ending the national bankruptcy by 2026. The economic growth of the nation has to be kept at the forefront. He also pointed out that economic growth is only possible if Sri Lankans can bear high taxes for the next six months. Due to the economic crisis last year, the LK economy has shrunk by 11%. Last month Wickremesinghe said the economy for the full year could contract by 3.5% or 4 %.
The goal of Wickremesinghe’s government is to bring inflation to a single digit by the end of this year. Currently, it scales to 54.2 % compared to December when the inflation level was at 57.2%, according to the Colombo Consumer Price Index.
The fears of the Sri Lankan people
Sri Lanka is trying its best to recover. Last month, the country took a big step by slashing its army to restructure the national economy. It is seeking a bailout package from IMF since last year and neighboring countries like India and China are continuously providing financial assistance. But high taxes, especially the income tax have put a hole in the pocket of the salaried worker. The majority of the population has been pushed towards poverty where every day they have to make choice between food and education.
Every day Sri Lanka is witnessing a protest as the government fails to revive the economy. Sri Lankan people are angry as they feel neglected. On February 4 which is Sri Lanka’s independence day, it was estimated that the country has splurged over SLR 200 million on the celebration, this has made people furious. The opposition called it a “crime and a waste of money.”
There are food and fuel shortages, and basic medical needs remain unfulfilled. The payments of citizens living below the poverty line have been delayed for months. The electricity prices have risen another 65% now, after increasing the prices up to 75% last August. Education and health face the most neglect.
Tracing Sri Lanka’s economic crisis
The economic crisis engulfed Sri Lanka when Gotbaya Rajapaksa and his family were elected to lead the country. The beginning of the crisis is predicted due to the COVID-19 pandemic which restricted tourism in Sri Lanka- a major sector of its economy. The ISIS-led Eastern Bombings in April 2019 also scared away tourists. But one must not ignore the economic mismanagement committed by the Rajapaksa family.
Mr. Rajapaksa made big tax cuts which lost the government income of more than $1.4 billion. The government further restricted exports by banning chemical farming and going completely organic. This resulted in crop failure, and the island nation was dependent on other nations for food supply which hit the foreign currency even more.
Only a few months into the crisis, the government could not handle the public anger. In July 2022, Mr. Rajapaksa fled to Singapore and resigned from his position. In the end, Ranil Wickremesinghe was appointed as the new President who is still in power.
Sri Lankan ex-president questioned over the hidden stockpile
When Rajapaksa resigned from his post in April 2022 and fled to Singapore, a few months later an angry mob of citizens attacked the Presidential House. They visited all the rooms and stayed in the president’s private quarters for several days. During the stay, one of them found a stockpile of 17.5 million rupees ($48,000) hidden in Rajapaksa’s private quarters that were later turned over to the police.
Now, the LK police are investigating Gotbaya Rajapaksa and other family members. The current regime has put the blame for the 2022 economic crisis on Gotbaya Rajapaksa.