PM Ranil should not be the fall guy for putting his neck out
Has China got hostile towards SL? What is the PM doing?
Sri Lanka is facing its worst performing cultivation season in more than a decade during the ongoing Yala season and there is a possibility of a looming food crisis in the coming months. This is largely due to the President’s failed fertilizer experiment. Today the country has no USD to even import the minimum fuel and gas required to meet the demands of the public. The Diesel shipments are slowly falling into place with the partial liberalization, but may take months to bring it back to some normalcy. The petrol supply has gone from bad to worse. Whilst CPC is begging from all the banks for liquidity.
LANKA IOC is constrained because the country has no forex liquidity to give them to import. The prime minister who took over the responsibility of brining some normalcy back, has become the fall guy for the opposition. Meanwhile no one knows how the JVP or Premadasa is going to resurrect the dying economy, that needs a $ 300 Million monthly infusion from overseas . Some analysts say the Chinese have promised that if there is a regime change they will assist with bridge finance.
Questions are being asked as to who is funding the JVP protests and if it is to derail the IMF program? Perhaps this is the reason the US Ambassador said in a statement that the US and the international community is fully focused on assisting people of Sri Lanka irrespective of who is President or Prime Minister or which party is governing.
It is very obvious to the writer that the country was run to the ground due to the incompetence of the Central bank . The CBSL made the cardinal mistake of defending the LKR and wasted nearly 5 Billion USD importing non essentials . Next they stopped the ongoing IMF program . Knowing very well tourism income of $4.5
Billion had almost disappeared due to the pandemic , neither did they reach out for the IMF emergency financial assistance.
Next the CBSL floated the LKR resulting in the lKR losing 50 % of the value overnight causing economic mayhem. The new Governor who was in the CBSL for over 30 years who is part of all these problems made bridge financing near impossible by defaulting on a paltry $78 million knowing very well the government was negotiating a SWAP deal of over 1 Billion USD . This was not to the liking of the Chinese government. Further the CBSL increased interest rates by 100% , wrongly assuming LKR was driving up inflation . When it was the USD illiquidity that was driving up inflation . As someone pointed out Nandalal Weerasinghe is running the economy using an AL economic text book . The Prime Minister in frustration said the CBSL was making Sri Lanka the next North Korea. It is the President who insisted and appointed Nandalal as Governor and gave him a six year term. The Prime minister unfortunately has to now carry the dead weight of the CBSL and face the consequences of their decisions . The CBSL claims our reserves are $1.8 Billion .
However our usable reserves are around $300 million. Educated people are now saying if the Central Bank is shut down for six months the country will recover very much faster and Businesses are saying the CBSL has become an impediment for recovery . By further tightening the monetary policy by jacking up interest rates the CBSL will destroy the livelihoods of 4.5 million people , because no business can make profits servicing interest of over 25% . Analyst say the monetary board lacks proper expertise or industry exposure. Unfortunately the Aragalya stalwarts say the Prime Minster has no plan and he must resign .
On the other hand Businessman Dhamika Perera also wants him to resign, because he delayed a Cabinet paper of his ministry . Businessman Perera is yet to learn how fast the government works. The reality is even if god takes over tomorrow, unless a magic wand is waved the Sri Lankan people will have to stomach a lot of pain and sallow several bitter pills for the economic mismanagement of Dr PB Jayasundara and SR Attygalle, ably led by President Gotabaya who always claimed he was doing a marvelous job . Both Jayasundara and Attygalle still remain at large with no action being taken against them. Why is the opposition protecting them? Ranil Wickramasinghe the last man standing on the deck is taking the flack for speaking the truth and for not fixing the economy in 4 weeks, when even the experts say country needs a minimum of 2 years to bring it back any kind of stability . The Prime Minister is not the most popular man, however we would still put our bets on the man provided he is given the room to take decisions and does not surround himself with the wrong people and crony businessmen.