Sri Lanka’s new government plans to sell its national airline to stem losses, part of efforts to stabilise the nation’s finances, even as authorities are forced to print money to pay government salaries.
The new administration plans to privatise Sri Lankan Airlines, Prime Minister Ranil Wickremesinghe said in a televised address to the nation on Monday. The carrier lost 45 billion rupees ($124 million) in the year ending March 2021, he said, just days before the nation is set to formally default on foreign debt.
“It should not be that this loss has to be borne by the poorest of the poor who have not set foot in an aircraft,” Mr Wickremesinghe said.
Mr Wickremesinghe — less than a week into the job — said he was forced to print money to pay salaries, which will pressure the nation’s currency. The nation has only one day’s stock of gasoline and the government is working to obtain dollars in the open market to pay for three ships with crude oil and furnace oil that have been anchored in Sri Lankan waters, Mr Wickremesinghe said.
“The next couple of months will be the most difficult ones of our lives,” Mr Wickremesinghe said. “We must immediately establish a national assembly or political body with the participation of all political parties to find solutions for the present crisis.”
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Violence raged across Sri Lanka late into the night on Monday, with five people dead and some 180 injured. AFP -
Sri Lanka's pro-government supporters vandalise camps of anti government protestors outside the president's office in Colombo. AP Photo -
Sri Lankan Prime Minister Mahinda Rajapaksa quit on May 9 after a day of violence saw four people, including an MP, killed. AFP -
Government supporters armed with sticks and clubs attack protestors. AFP -
Demonstrators scuffle with police outside the president's office in Colombo. AFP -
Demonstrators and government supporters clash. AFP -
Police personnel stand guard outside the president's office. AFP -
Destroyed vehicles litter the street after anti-government protesters rioted in Colombo. AFP -
Pro-government supporters hold Prime Minister Mahinda Rajapaksa's portrait while protesting. AFP -
A bus burns close to Sri Lanka's outgoing Prime Minister Mahinda Rajapaksa's official residence in Colombo. AFP -
Anti-government protesters destroy a bus in Colombo. AFP -
Army personnel stand guard outside the president's office in Colombo. AFP -
Supporters of the Sri Lankan government attempt to block a police water canon truck. AFP -
People gather near a burning bus in Colombo. AFP -
Anti-government demonstrators set fire to the house owned by Cabinet Minister Sanath Nishantha. Reuters -
Sri Lankans push a bus, transporting government supporters who attacked anti-government protesters, into a lake in Colombo. AP Photo -
A policeman fires tear gas during a clash. AFP -
Sri Lankan Prime Minister Mahinda Rajapaksa resigned on Monday over the country’s dire economic state and violence at mass protests outside his home in Colombo, his spokesman Rohan Weliwita said. AP -
Demonstrators and government supporters clash outside the official residence of Mahinda Rajapaksa, 76, who offered his resignation to his younger brother, President Gotabaya Rajapaksa. AFP -
A man suffers after being sprayed with tear gas as cars burn on the streets of Colombo, Sri Lanka. AP -
Paramilitary police arrive as demonstrators and government supporters clash. AFP -
Sri Lankan government supporters cheer outside the prime minister's residence in Colombo. AP -
Supporters of the ruling party run as riot police fire tear gas during clashes in Colombo, amid the country's economic crisis. Reuters -
A policeman stands guard in riot gear. AP -
Water cannon are fired during a confrontation with anti-government demonstrators. Reuters -
Supporters of Sri Lanka's ruling party run in Colombo as police fire tear gas during a clash with anti-government demonstrators. Reuters -
A Sri Lankan Catholic priest, centre in a white robe, is among anti-government protesters being attacked by supporters of the ruling party outside the prime minister's residence. AP -
Tears after anti-government protesters were attacked by supporters of the ruling party in Colombo. AP -
Violence flares between demonstrators and government supporters outside the president's office in Colombo. AFP -
Activists stage a mock ritual to 'exorcise demons' outside the official residence of Sri Lanka's prime minister. AFP
The premier pledged to announce a new “relief” budget to replace President Gotabaya Rajapaksa’s “development” budget that helped stoke Asia’s fastest inflation rate. The cabinet will propose that parliament increase the treasury bill issuance limit to 4 trillion rupees from 3 trillion rupees, Mr Wickremesinghe said, forecasting a budget deficit of 13 per cent of gross domestic product for the year ending December 2022.
Mr Wickremesinghe’s appointment last week followed violent clashes between government supporters and protesters demanding Rajapaksa’s resignation. He has yet to appoint a finance minister to lead bailout talks with the International Monetary Fund, and is seeking bridge loans from nations including India and China. But it’s unclear if the government will get the cash in the absence of a full cabinet.
Sri Lanka is sliding into a default as the grace period on two unpaid foreign bonds ends on Wednesday, the latest blow to a country rattled by economic pain and social unrest.
The nation’s dollar bonds edged higher on Monday, although they remained deep in distressed territory. The extra yield investors demand to hold the sovereign notes over US Treasuries narrowed 22 basis points to 37.29 percentage points, according to JPMorgan Chase.
In 2010, the government in Colombo bought back a stake in Sri Lankan Airlines from Dubai’s Emirates. The national carrier, which has a fleet of 25 Airbus SE planes, flies to destinations in Europe and the Middle East, as well as South and Southeast Asia, according to FlightRadar24.
