Sri Lankan government dissolved on Wednesday announced Ten hours of “drainage” for parts of the commercial capital of Colombo, starting at 10 PM Saturday.
Water cuts will add to daily power cuts and fuel shortages, while the corrupt socialist government will not pay its debts.
President Gotabaya Rajapaksa continued to ignore calls for his resignation as mass protests took place in the streets. On Tuesday, Rajapaksa’s allies won in parliament back off The opposition offered to convict him. It was the first parliamentary session to convene after the protests turned violent last week.
All members of the Rajapaksa family, who previously held almost all key positions in his administration, resigned. The last to leave was her brother Mahinda, who resigned as prime minister last week. New Prime Minister Ranil Wickremesinghe made a televised statement on Monday, warning Sri Lankans that they must face the “unsatisfying and disgusting realities” of fiscal deficits and disruption.
“Currently our fuel is just one day old. The next two months will be the hardest of our lives,” said Wickremesinghe. “In the short term, our future will be more difficult than the difficult times we’ve been through.”
The prime minister said the Sri Lankan central bank would start printing money to pay government fees, which would worsen a serious inflationary crisis. He proposed the privatization of the state-owned national airline as a first step towards urgent reforms.
“I am compelled, against my will, to allow money to be minted to pay government employees and pay for essential products and services. But we must not forget that printing money causes the rupee to depreciate,” he said.
A Colombo resident told the BBC on Tuesday that most of the city’s gas stations were closed, except for a few filled with government vehicles. The lines at these stations quickly grew to a length of one mile.
“I am now working from home to save fuel because who knows when I will get a full tank again,” the Sri Lankan said.
Energy Minister Kanchana Wijeseker constant Parliament said on Wednesday that the government has no dollar reserves to pay for fuel deliveries and has left a fuel tanker in the port of Colombo since the end of March.
“We were trying to find money, but by the weekend there was no fuel. A very small supply of spare fuel is freed up for essential services like ambulances,” he said.
Al Jazeera news He warned Wednesday that the next challenge in Sri Lanka could be a “man-made food crisis” as the government’s chemical fertilizer ban has caused the loss of all rice and banana crops.
One farmer said the mandatory switch to organic products reduced vegetable yields from 882 pounds to 110 pounds in March. Others said they could no longer afford to grow food for sale and had to focus on feeding their families, which would be sad news for Sri Lankan residents.
On Wednesday, Sri Lanka passed the coupon deadline for two government bonds, leading to a technical default. This is the first default on government debt since Sri Lanka gained independence from the United Kingdom in 1948.
Prime Minister Wickremesinghe said Sri Lanka had received $160 million in “bridge financing” from the World Bank, but was unsure whether that money would be used for fuel. At least JPMorgan was prepared to support more Sri Lankan government bonds on Wednesday. guess “Political stability” will gradually return to the island.
More pessimistic analysts have predicted a series of Third World defaults as economies grappling with irresponsible government spending, corruption and the Wuhan coronavirus pandemic have suffered shock waves from events such as Russia’s invasion of Ukraine.
“I am very concerned about the situation in developing countries. They face the possibility of a spike in energy, fertilizer and food prices and higher interest rates. Every single one of them hit them hard,” World Bank President David Malpass said last month.
Sri Lanka has been crushed by decades of brutal socialist spending, with its treasury dipped into the bloated and mismanagement of state-owned enterprises like the aforementioned national airline or dude into the pockets of the political elite. Easy money from China’s Belt and Road Initiative (BRI) strengthened the Rajapaksa regime, making Sri Lanka deeply mortgaged to Chinese banks. When the BRI money ran out, the ruling family was completely unprepared to meet the stricter standards demanded by lenders like the International Monetary Fund (IMF).
This is similar to the story that can be played out in any number of other developing countries, especially those that depend on China’s BRI currency. BRI’s projects are unlikely to be profitable as Chinese banks have accumulated large amounts of debt that Beijing can use to politically influence client states, a process that has been clearly demonstrated in Sri Lanka.
Source: Breitbart
