Sri Lankan leader proposes 25-year plan for crisis-hit nation – The Diplomat

Sri Lanka’s new president said Wednesday his government is preparing a national policy roadmap for the next 25 years that aims to reduce public debt and turn the country into a competitive export economy as it seeks a way out of its worst economic disaster.

President Ranil Wickremesinghe said in a speech to Parliament that Sri Lanka needs long-term solutions and a solid foundation to stop a recurrence of economic crises.

Massive public protests blamed Wickremesinghe’s ousted predecessor Gotabay Rajapakasa and his powerful family for years of mismanagement and corruption that bankrupted the country and led to an unprecedented shortage of basic necessities such as fuel, medicine and cooking gas. But many remain skeptical of Wickremesinghe and accuse him of trying to protect the former leader and his family.

Sri Lanka announced in April that it was suspending the repayment of foreign loans. Its total external debt is $51 billion, of which $28 billion must be repaid by 2027.

Wickremesinghe said his government has initiated talks with the International Monetary Fund on a four-year rescue plan and has begun finalizing a debt restructuring plan.

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“We will submit this plan to the International Monetary Fund in the near future and will hold talks with the countries that provided loan assistance. Subsequently, negotiations with private creditors will also begin to come to a consensus,” he said.

Wickremesinghe has previously said negotiations with the IMF were hampered by Sri Lanka’s bankruptcy and that reaching an agreement with the agency in early August was not possible and is now expected in September due to social unrest in the country.

He said difficulties have been eased somewhat by reducing power outages, importing fertilizer for growing and improving the distribution of gas for cooking.

“Security measures have been taken to avoid food shortages. Delivery of necessary medicines and medical equipment to hospitals has begun. Schools were reopened. Measures are being taken to overcome the obstacles faced by industries and export industries,” he said.

Instead of relying on foreign loans to import fuel, Wickremesinghe said, Sri Lanka should initiate a system in which export earnings and foreign workers’ remittances are used for purchases.

“We also need to limit certain types of imports in order to balance payments for fuel. On the other hand, it is necessary to reduce the fuel supply. These difficulties will have to be overcome before the end of this year.”

He thanked the prime minister of neighboring India, Narendra Modi, for giving Sri Lanka a breath of life by providing timely assistance through lines of credit and loans to buy food, medicine and fuel.

Wickremesinghe said the government’s goal is to run a core budget surplus by 2025 and reduce public debt, which currently stands at 140 percent of GDP, to less than 100 percent by 2032.

“The economy must be modernized. Economic stability must be established and transformed into a competitive export economy. In this context, we are now preparing the necessary reports, plans, regulations, laws and programs,” he said.

“If we build a country, a nation and an economy through national economic policies, we can become a fully developed country by 2048, when we celebrate 100 years of independence,” Wickremesinghe said.

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Wickremesinghe was elected president last month to complete Rajapaksa’s remaining five-year term, which ends in 2024. Rajapaksa fled the country after protesters, enraged by the economic hardship, stormed his official residence and occupied several key government buildings.

Wickremesinghe crushed the protests and many of the demonstrators were arrested on charges of trespassing and damaging public property. The protest camps set up in front of the president’s office were dismantled by armed soldiers who beat the protesters.

However, Wickremesinghe denied on Wednesday that he had been “hunting down” the protesters.

He said he would protect peaceful demonstrators and opened an office to deal with complaints of any wrongdoing. People who break the law unknowingly or at the instigation of others will be treated “sympathetically,” he said, and those who deliberately engage in violence will be held accountable.

Wickremesinghe said that because the youth had taken the lead in the protests and wanted changes in the political system, he would give up his seat in parliament in the next election to more youth.

“The next election should be the term of the youth. I believe that the creation of a new constitution with new guidelines to provide space for young people is one of the top priorities. “

He sought friendship between political parties, saying that only an all-party government could solve the country’s problems.

“At this stage, all the citizens of the country expect all their representatives in parliament to work together to build the country,” he said.