Election may be the only option to bring stability to Sri Lanka

The country is losing millions a day due to political instability and chaos. Therefore even if it needs to fund an election, it may be the only option to bring some order into the country which is descending fast into a total failed state

Tuesday, 10 May 2022

After today’s unprecedented clashes on the streets of Colombo and outstations, Sri Lanka will face unprecedented economic turmoil, as the deepening economic and political crisis will trigger fierce street demonstrations and clashes, while a political impasse plays out as President Gotabaya Rajapaksa continues to defy calls to step down as President, whilst his brother Mahinda tenders his resignation due to massive public pressure, complicating further the efforts to find a political solution to the current situation.

Economy

Sri Lanka’s usable foreign reserves are down to $ 25 million, the International Monetary Fund, assistance might take up to four-six months to come through. The hard facts are; no gas for households. The oil tanker 40,000 MT is due, the bulk will go to CEB and there will be massive shortage for transport vehicles, next week the credit line with India will come to an end. The World Bank is to give $ 600 m as bridging finance, to be dispersed over four-six months. The $ 100 m per month will not cover the current monthly CEB fuel bill. The tragedy is that goods shortages will increase daily as there is no foreign exchange to clear shipments in the port. 

The CBSL Governor has put a stop to the open account transaction, this is a sale where goods are shipped and delivered before payment is due. It is estimated that 20% of imports come via this method. This will add to the chaos and shortages in the country in addition to the high borrowing rates. Overall, food shortage will increase daily as limited petrol will be available to transport vegetables, etc. from outstation, and the general distribution of goods will also get curtailed for the same reason.

Protests

The majority of the public since early April have wanted the President, PM and Cabinet to resign and form an all-party government of all parties. However SJB leader Sajith Premadasa says he does not want to be Prime Minister, the JVP leader Anura Kumara Dissanayake has categorically stated that he will not join an administration that is led by Gotabaya Rajapaksa. Former Prime Minister Ranil Wickremesinghe too has expressed similar concerns. Whilst one can hope that a national government manages to put things in order in Sri Lanka, that will not be an easy task with the current parliament. 

A reluctant national government is doomed to fail and will only create further chaos. The country desperately needs a new government with a fresh mandate to provide political stability and raise funds internationally. The country is losing millions a day due to political instability and chaos. Therefore even if it needs to fund an election, it may be the only option to bring some order into the country which is descending fast into a total failed state.

Failure of leadership

Unfortunately for the past four weeks Parliament has been discussing who will run the country and take the key posts, without getting back to the business of running the country, like proper leaders. The situation is very, very dire. There is no quick fix at all to the massive economic crisis. It is a question of putting in place a set of clear measures immediately that will eventually help to reach a point of stability and order. Things are going to get really bad before they get better. Unfortunately, there is no escaping from that from now on, the people are in for very hard times in the next couple of weeks with oil, food and medicine shortages and queues. The politicians must set an example by making big sacrifices to win back the confidence of the masses.