Carnival Magic
Carnival Magic 333 at the beach Pro Property Partners British International School, Phuket
The Phuket News Novosti Phuket Khao Phuket

Login | Create Account | Search

Sri Lanka’s economy on brink of collapse as troops quell unrest

Sri Lanka’s economy on brink of collapse as troops quell unrest

COLOMBO: Sri Lanka’s economy will “collapse” unless a new government is urgently appointed, the central bank chief warned yesterday (May 11), as security forces fanned out on the streets to restore order after spasms of mob violence.


Thursday 12 May 2022, 08:15AM

Sri Lankan police have been ordered to go on the offensive and use live ammunition to stop rioting, a top official has said. Photo: AFP

Sri Lankan police have been ordered to go on the offensive and use live ammunition to stop rioting, a top official has said. Photo: AFP

Police say nine people have died since Monday, when frustration at a dire economic crisis erupted into clashes between backers and opponents of President Gotabaya Rajapaksa, injuring more than 200.

Opposition parties have refused Rajapaksa’s overtures for a unity government to resolve a political deadlock and instead demanded his resignation.

Central Bank Governor Nandalal Weerasinghe said it was critical that a new administration take charge by tomorrow or the country would suffer a catastrophe.

“The economy will completely collapse and no one will be able to save it,” he told reporters.

“The country was fast going down a slope when I took over just over a month ago. I thought we were able to apply the brakes, but with events of Monday the brakes no longer work.”

Shortly after taking over as the bank’s chief in April, Weerasinghe announced a default on Sri Lanka’s US$51 billion external debt, saying the country had no money to pay its creditors.

He said political stability was vital to implement the reforms needed to address Sri Lanka’s snowballing debt crisis and the acute shortage of foreign exchange to import essentials.

Security forces have largely curbed public disorder after they were deployed to enforce a nationwide curfew with orders to “shoot on sight” anyone engaged in looting or violence.

“If the situation is not brought under control, there could be total anarchy,” a senior security official told AFP on condition of anonymity.

Deserted streets

The capital Colombo was almost deserted yesterday aside from soldiers manning checkpoints, near the charred remains of buses that had been set alight by anti-government crowds.

With armoured personnel carriers and a heavy security presence, Sri Lanka’s military chief addressed a press conference to deny speculation of a looming coup.

“Don’t ever think that we are trying to capture power,” said Kamal Gunaratne, the secretary of Sri Lanka’s defence ministry.

“The military has no such intentions.”

A small crowd continued to defy the curfew near the president’s seafront office, where a protest camp has for the past month maintained a vigil calling on him to step down.

HeadStart International School Phuket

“We want the whole Rajapaksa clan out because they are so, so corrupt. They have been eating into Sri Lanka like a caterpillar eating into some fruit,” activist Kaushalya Fernando told AFP.

In a tweet, Rajapaksa yesterday called for “all Sri Lankans to join hands as one, to overcome the economic, social & political challenges”.

But the main opposition SJB party reiterated it will not be a part of any government with Rajapaksa still president, even after his brother Mahinda’s resignation as prime minister on Monday.

Turning point

Sri Lankans have been suffering shortages of essential goods, fuel and medicines for months in the island’s worst economic downturn since independence in 1948.

The crisis moved into a darker phase on Monday when government supporters with sticks and clubs attacked demonstrators who had been protesting peacefully for weeks demanding the president’s resignation.

Mobs then retaliated across the country, torching dozens of homes of ruling-party politicians.

Mahinda Rajapaksa had to be rescued in a pre-dawn military operation on Tuesday and taken to a naval dockyard for safety after protesters tried to storm his official residence.

Echoing the UN rights chief and the European Union, the United States on Tuesday said it was concerned both with the violence and the deployment of the military.

“We stress that peaceful protesters should never be subjected to violence or intimidation, whether that’s on the part of the military force or civilian units,” State Department spokesman Ned Price told reporters.

India meanwhile was forced to deny social media rumours - some using old images of Mahinda boarding a helicopter - that it was helping Rajapaksa family members to flee.

The Indian “High Commission would like to categorically deny speculative reports in sections of media and social media about India sending her troops to Sri Lanka,” said a statement.

With vital tourism revenues torpedoed by the pandemic, Sri Lanka last month defaulted on its foreign debt, some of it stemming from Rajapaksa vanity projects built with Chinese loans.

The International Monetary Fund this week began a “virtual mission” of staff-level talks on a possible bailout.

IMF mission chief Masahiro Nozaki said the lender aimed to be “fully prepared for policy discussions once a new government has been formed”.

Comment on this story

* Please login to comment. If you do not have an account please register below by simply entering a username, password and email address. You can still leave your comment below at the same time.

* (Not Hotmail/Outlook)

Be the first to comment.


Have a news tip-off? Click here


Phuket community
Officials clarify Phuket metered taxi fares

@Kurt. Who says you will end up, upside down or 'embracing' a pole? Who says you'll be &...(Read More)

Chiang Mai hospitals overflow with pollution sufferers

soon we can buy cheap houses in Chiang Mai ...(Read More)

Chinese Christians detained in Bangkok

what the different from christian chinese and other chinese? i find it quiet funny that they need to...(Read More)

Officials clarify Phuket metered taxi fares

Pooliekev reaction is derailing, almost defamation. We are 9 families who are afraid to danger thems...(Read More)

Phuket Opinion: Steering clear of trouble

Great piece of 'Opinion'! When it becomes clear Phuket ( my opinion)will not get the Expo-&#...(Read More)

Phuket Opinion: Steering clear of trouble

Living in harmony and sharing prosperity, joke of day and april fools was yestrday. Put on TV any ev...(Read More)

Phuket water supply reservoirs 65% full

The real 'shape' of the water reservoirs is very different from what is shown as reservoir m...(Read More)

Phuket water supply reservoirs 65% full

....Why no pro-active working of all these Administrations to get all this water house hold problems...(Read More)

Phuket water supply reservoirs 65% full

Mr Chaiwat's appeal to reduce volume of water use comes just 13 days before Songkran celebration...(Read More)

Foreigners arrested, property seized in child sex trafficking raids

Kamala Pete, age of consent regards between private lovers/friends, etc. Prostitution is all togeth...(Read More)