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    Few Dare to Steer Sri Lanka’s Rudderless Economic Ship

    GovernanceFinance and EconomyFew Dare to Steer Sri Lanka’s Rudderless Economic Ship
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    Few Dare to Steer Sri Lanka’s Rudderless Economic Ship

    Two Sri Lankan finance ministers have resigned in the space of two days. The governor of the country’s central bank had also resigned on Monday, and on Tuesday, the treasury secretary put in his papers.

    A spate of resignations of top officials charged with steering Sri Lanka’s economy has exacerbated the dire state of the country’s economy.

    Sri Lanka’s newly appointed Finance Minister Ali Sabry resigned on Tuesday, within 24 hours of his appointment.

    Sabry had replaced President Gotabaya Rajapaksa’s brother, Basil Rajapaksa who resigned with his 25 other cabinet colleagues.

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    Sabry said that his resignation comes “after much reflection and deliberation, and taking into consideration the current situation”.

    The island nation’s treasury secretary S R Attygalle too resigned his portfolio on Tuesday. This accelerated the momentum of the country’s economic crisis turning into a political crisis.

    Earlier, the governor of the country’s central bank’s, Ajith Nivard Cabraal had resigned on Monday after a weekend of protests over rising living costs and power cuts.

    The resignation of the central bank governor has put on hold already delayed decisions on interest rate, adding to the instability of the Sri Lankan rupee.

    Treasury secretary Attygalle was second to the central bank governor Cabraal.

    It is now learnt that a former deputy governor, P Nandalal Weerasinghe, will take up the position of the central bank governor, eight years after he had left Australia.

    Sri Lanka’s worsening crisis follows a series of mismanaged economic decisions, beginning with the decision to impose organic farming overnight. Food production fell and simultaneously, as if the Gods had planned it thus, the COVID-19 pandemic brought tourist arrivals to a grinding halt.

    In a matter of days, thousands of Sri Lankan overseas workers too returned home. The government resorted The resulting foreign exchange crisis meant that there was no fuel to run power-generation stations and a shortage of essential commodities.

    The government’s decision to print more currency didn’t help either.

    With galloping inflation, closing industries, increasing debts and a poor record of servicing foreign debts, the country today offers a textbook case of how not to handle a country’s economy.

     

    Image: Wikimedia

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