Sri Lanka's Prime Minister Ranil Wickremesinghe was given additional responsibility on Wednesday as the finance minister to steer the debt-ridden country out of the woods and secure international confidence in his government's ability to address the worst economic crisis since independence.
Wickremesinghe, 73, was sworn-in as the Minister of Finance, Economic Stability and National Policies by embattled President Gotabaya Rajapaksa, who is facing popular anger for the unprecedented economic crisis.
The five-time prime minister was re-appointed to the job on May 12 following the political circus precipitated by the unprecedented economic crisis in the island's history.
He replaced Mahinda Rajapaksa who resigned to make way for his brother's plan to appoint an all-party interim government to handle the economic crisis.
Wickremesinghe's office said during the two weeks he had been at the helm he had reestablished the island's foreign relations, taken steps for constitutional reform with the draft of the 21 amendments to the constitution, ensured fuel supplies and has been making preparations for an interim budget.
Last week, Wickremesinghe warned that said the next couple of months will be the most difficult ones in the lives of all citizens and the country must prepare to make some sacrifices and face the challenges of this period.
“Every time the international community supported Wickremesinghe and he improved the economy, the Opposition toppled his government and derailed economic policy gains. So, this time, the international community is not ready for such a derailment,” EconomyNext website quoted a political analyst who was close to the last government as saying.
“They want a policy commitment that's sustainable over a long period of time whether Wickremesinghe is there or not. If Sri Lanka needs to come out of this economic crisis and prevent another crisis, the country needs a sound economic policy, and that is what the international community expects from Sri Lanka this time,” the analyst said.
But the task for Wickremesinghe is huge. With just his seat in the 225-member assembly, the prime minister has to depend on all political parties to support him in his immediate task of reviving the ailing economy.
Already the World Bank has ruled out bridge financing or new loan commitments to the crisis-hit country until the government sets up an adequate macroeconomic policy framework.
Sri Lanka declared bankruptcy in mid-April saying it was unable to meet its international debt payments this year. This prompted two of the world's biggest credit rating agencies to declare that Sri Lanka has defaulted.
The country has just started negotiations with the IMF for a possible bailout which the Rajapaksa administration had been ignoring.
Wickremesinghe took over at a time when street protests were raging against the government for its mishandling of the economy that has led to the crisis, the worst since the country gained independence in 1948.
A predominant youth protest has continued since April 9 urging for the resignation of Gotabaya Rajapaksa as the president.
However, the President has refused to resign.
Sri Lanka is near bankruptcy and has severe shortages of essentials from food, fuel, medicines and cooking gas to toilet paper and matchsticks. For months, people have been forced to stay in long lines to buy the limited stocks.
Sri Lanka has suspended repayment of about USD 7 billion in foreign loans due this year out of USD 25 billion to be repaid by 2026. The country's total foreign debt is USD 51 billion.
The island nation however is in need of USD 4-5 billion bridging finance to arrest the crisis where shortages of essentials had led to street rioting.
Sri Lanka's economic crisis has created political unrest with a protest occupying the entrance to the president's office demanding his resignation continuing for the past 40 days. The crisis has already forced prime minister Mahinda Rajapaksa, the elder brother of the president, to resign on May 9.
An inflation rate spiralling towards 40 per cent, shortages of food, fuel and medicines and rolling power blackouts have led to nationwide protests and a plunging currency, with the government short of the foreign currency reserves it needed to pay for imports.