International

Sri Lankan President admits ‘no delivery’ as prices rise

By AFP

Colombo: Sri Lankan President Gotabaya Rajapaksa has admitted that his government is “not distributing” as food, medicines and other essential items remain scarce due to severe foreign exchange shortages.

“People may have a sense of resentment towards me and the government for not doing things as expected,” Rajapaksa’s office quoted him as saying on Sunday.

“I accept it. Not only me, but all ministers and members of parliament should accept it,” he told soldiers on the occasion of the 72nd anniversary of the establishment of the army.

Foreign exchange shortages have hampered the island nation’s ability to import goods of 21 million people, prompting the government to declare a state of emergency and impose rationing.

The government on Friday lifted price restrictions on essential food items to eliminate hoarding of staples such as rice, sugar, pulses and milk powder.

Within hours of Rajapaksa’s remarks on Sunday, the government also announced an 85 percent hike in the price of liquefied petroleum gas, used in cooking stoves, from Monday.

The prices of wheat flour and cement also increased by about 10 per cent.

State-run Petroleum Corporation said it is asking the government to substantially increase retail prices of all fuels to offset the $350 million loss in the first eight months of this year.

Private economists and international rating agencies say Sri Lanka’s economic crisis pre-pandemic.

Foreign reserves stood at $7.5 billion when Rajapaksa took office in November 2019, but had fallen to $2.5 billion by the end of September, raising concerns about Colombo’s ability to repay its huge foreign debt.

Soon after coming to power, Rajapaksa slashed sales taxes in half and significantly reduced taxes on corporate profits and personal income, in the hopes that it would boost investment and boost the economy.

But instead Sri Lanka recorded its worst economic performance last year, with a 3.6 percent contraction in production, largely due to the pandemic hitting out at tourism.

The government banned the import of non-essential goods, including vehicles, in March 2020 due to currency crunch.

Back to top button