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Sri Lanka’s Rajapaksa ousted, ally nominated as successor
Global Banking & Finance Review®
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By Uditha Jayasinghe, Alasdair Pal and Devjyot Ghoshal
By Uditha Jayasinghe, Alasdair Pal and Devjyot Ghoshal
COLOMBO (Reuters) -Sri Lanka’s parliament accepted the resignation of President Gotabaya Rajapaksa on Friday after he fled the country, paving the way for lawmakers to start repairing the island’s shattered politics and resume efforts to ease its economic crisis.
After suffering from crippling shortages of petrol and diesel and runaway prices of basic items like vegetables and bread for months under the rule of Rajapaksa and his brothers, Sri Lankans are now waiting for lawmakers to elect a new president on July 20.
Until then, Prime Minister Ranil Wickremesinghe will be the interim president although protesters want him gone too. His private residence was set ablaze by demonstrators last weekend and his office stormed this week.
Nevertheless, the ruling Sri Lanka Podujana Peramuna (SLPP) party on Friday nominated Wickremesinghe to take up the top job full-time.
“Ranil Wickremesinghe is not the change we have fought so hard for,” said Wimal Jayasuriya, 43, a martial arts specialist who is on a hunger strike opposite the prime minister’s official residence that was also sacked by protesters.
“We will not allow him to be president. The SLPP parliamentarians should stand with the people and not allow Ranil Wickremesinghe to become president.”
The speaker of parliament, Mahinda Yapa Abeywardena, said lawmakers would “constitutionally appoint a new president”.
“It will happen quickly and successfully. I request everyone to support this process,” said Abeywardena, who received Rajapaksa’s resignation the previous night.
Rajapaksa landed in Singapore on Thursday, having fled to the Maldives early on Wednesday on a military jet along with his wife and two security guards. Protesters occupied his home and office last weekend after surging past armed guards.
Sri Lanka’s top court on Friday barred two of his brothers, former Prime Minister Mahinda Rajapaksa and former Finance Minister Basil Rajapaksa, from leaving the country without permission until July 28, according to anti-corruption group Transparency International Sri Lanka.
The group approached the court seeking “action against persons responsible for the current economic crisis”.
A lawyer for the brothers did not respond to calls from Reuters.
“We are so happy today that he resigned and we feel that when we, the people, come together, we can do everything,” said Arunanandan, 34, a school teacher who had been camping at the main protest site opposite the presidential secretariat for the past three months.
“We are the real power in this country.”
Sri Lanka is a major tourist destination in the Indian Ocean and well known for its tea industry and garment exports.
Speaker Abeywardena said he hoped to complete the process of selecting a new president within a week. Parliament would reconvene on Saturday and be notified formally of the vacancy at the top, with a vote for a new president set for July 20.
The Bar Association of Sri Lanka, an influential lawyers’ collective, called on parliament to ensure that the election of Rajapaksa’s successor is held without delay.
The opposition’s presidential nominee is Sajith Premadasa, while the potential dark horse is senior lawmaker Dullas Alahapperuma.
PRESIDENTIAL POWERS
After he was sworn in by the chief justice as interim president, Wickremesinghe said he would follow the constitutional process and establish law and order in the South Asian country.
He also vowed to start moves to increase parliament’s powers and reduce those of the president, as demanded by protesters.
“This change can be completed by the new president once he is elected by parliament next week,” Wickremesinghe said.
Street protests over Sri Lanka’s economic meltdown simmered for months before boiling over last weekend when hundreds of thousands of people took over government buildings in Colombo, blaming the Rajapaksa family and allies for runaway inflation, shortages of basic goods, and corruption.
Serpentine queues outside fuel pumps have become common, while the government has closed schools and enforced work-from-home for office workers to conserve fuel.
The country of 22 million people has nearly run out of dollars for imports and has defaulted on foreign loans.
Headline inflation hit 54.6% last month and the central bank has warned that it could rise to 70% in coming months.
Sri Lanka had begun preliminary discussions with the International Monetary Fund about a potential bailout loan, but these have been interrupted by the latest government chaos.
IMF spokesman Gerry Rice told reporters on Thursday that Fund staff were still in contact with technical-level government officials but hoped to resume high-level dialogue “as soon as possible”.
Sri Lanka has received aid and other support amounting to $3.8 billion https://www.mea.gov.in/media-briefings.htm?dtl/35494/Transcript_of_Weekly_Media_Briefing_by_the_Official_Spokesperson_July_14_2022 from neighbour India this year. It has also sought help from China, its fourth biggest lender.
Sri Lanka’s ambassador to China told Bloomberg Television that the country was in negotiations with Beijing for as much as $4 billion in aid, and was confident of receiving it “at some point”.
(Repoting by Uditha Jayasinghe Alasdair Pal Devjyot Ghoshal; Additional reporting by Sunil Kataria, Sudarshan Varadhan and Shilpa Jamkhandikar; Writing by Devjyot Ghoshal and Krishna N. Das; Editing by Clarence Fernandez, Raju Gopalakrishnan and Mark Heinrich)
Inflation is the rate at which the general level of prices for goods and services rises, eroding purchasing power. Central banks attempt to limit inflation to keep the economy running smoothly.
A central bank is a financial institution that manages a country's currency, money supply, and interest rates. It oversees the banking system and implements monetary policy.
A financial crisis is a situation in which the value of financial institutions or assets drops rapidly, leading to a loss of confidence in the economy and potential economic downturn.
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