Sri Lanka Crisis: Rajapaksa government dismisses reports of Indian troops in country

Lankan Defence Ministry dismisses reports Indian troops in country to help maintain law and order

TheSriLankan Defence Ministry on Saturday rejected social media speculation that Indian Armed troops had arrived in the island nation to help maintain law and order, amidst growing public protests on rising prices and scarcity of essential commodities.

Protestors hold banners and placards during a demonstration against the surge in prices and shortage of fuel and other essential commodities in Colombo

Credit: AFP Photo

Protestors hold banners and placards during a demonstration against the surge in prices and shortage of fuel and other essential commodities in Colombo

Credit: AFP Photo

40,000 MT diesel from India reaches crisis-hit Lanka as it struggles to mitigate power outage

A consignment of 40,000 metric tonnes of diesel from India reachedSriLankaon Saturday, the fourth such assistance from New Delhi, to mitigate the spike in power cuts in the island nation, which is facing an unprecedented economic and energy crisis caused due to shortage of foreign exchange.

Power cuts lasting over 13 hours were imposed on Thursday, the longest cut since 1996 when a strike by the state power entity employees caused a 72-hour black out.

Sri Lanka imposes curfew until Monday morning

SriLankan government on Saturday announced a curfew across the country from 6 pmon Saturday until 6 amon Monday, after the president declared a state of emergency.

"Under the powers given to the president curfew has been imposed countrywide from 6 pmon Saturday to 6 amon Monday," the government's information department said.

A soldier examines the charred out remains inside a burnt-out bus near Sri Lanka's President Gotabaya Rajapaksa's home. Credit: AFP Photo

Commuters move past soldiers standing on guard along a street in Colombo. Credit: AFP Photo

The SLPP coalition, an alliance of 11 parties, has been in trouble recently. Two of the 11 party leaders were sacked as Cabinet ministers while another Cabinet member has joined them in criticising the government's handling of the economic crisis.

Sri Lanka’s former president Maithripala Sirisena’s Freedom Party has called on President Gotabaya Rajapaksa to form an all-party government to tide over the worst economic crisis in the island nation and said that it may leave the alliance if its request

Party’s general secretary and a state minister Dayasiri Jayasekera said that the Central Committee decided on Friday to urge for the formation of a government representing all parties in Parliament.

The Sri Lanka Freedom Party (SLFP) with 14 Members of Parliament is the largest group within the Sri Lanka Podujana Peramuna (SLPP) ruling coalition.

Sirisena is SLPP chair but he is not a minister.

Sri Lanka's government prepares for talks with the International Monetary Fund amid concerns over the country's ability to pay back foreign debt.

India, the world's biggest rice exporter, last month agreed to provide the $1 billion credit line to help ease crippling shortages of essential items, including fuel, food and medicine.

The rice shipments could help Colombo bring down rice prices, which have doubled in a year, adding fuel to the unrest.

Indian traders have started loading 40,000 tonnes of rice for prompt shipment to Sri Lanka in the first major food aid since Colombo secured credit line from New Delhi.

The Indian Ocean island nation of 22 million people is struggling to pay for essential imports after a 70% drop in foreign exchange reserves in two years led to a currency devaluation and efforts to seek help from global lenders.

The shipment of the staple comes before a key festival in Sri Lanka.

Fuel is in short supply, food prices are rocketing and protests have broken out as Sri Lanka's government prepares for talks with the International Monetary Fund amid concerns over the country's ability to pay back foreign debt.

India also supplied 6000 MT of fuel to the Ceylon Electricity, Sri Lanka

Indian traders have started loading 40,000 tonnes of rice for prompt shipment to Sri Lanka in the first major food aid since Colombo secured a credit line from New Delhi.

The Lankan government has said it is seeking a bailout from the International Monetary Fund while asking for fresh loans from India and China.

Shops opened in Sri Lanka's capital city Colombo amid tight security on Saturday - the first day after a state of emergency was declared to tackle growing unrest amid an unprecedented economic crisis.

In an order late on Friday, President Gotabaya Rajapaksa invoked tough laws that allow the military to arrest and detain suspects. The state of emergency was necessary to protect public order and to maintain essential supplies and services, he said in a proclamation.

Even in times of crisis Sri Lankanks have shown great generosity towards Ukrainians and Russian tourists

Sri Lanka has granted free visa extensions for citizens of both countries. Many Russian tourists are also stuck in the country, cut off from funds after US sanctions on international payment networks.

Ukrainians with empty wallets, distraught over the fate of loved ones back home, say they have been overwhelmed by support from Sri Lankan locals -- despite their own travails in the face of a worsening financial crisis

Police arrested 53 people and imposed a curfew in and around Colombo on Friday to contain sporadic protests that have broken out over shortages of essential items, including fuel and other goods

Troops armed with sweeping powers to detain suspects were deployed in Sri Lanka Saturday, hours after the president declared a state of emergency as protests against him escalated

Soldiers armed with automatic assault rifles were already deployed for crowd control at fuel stations and elsewhere when the emergency was invoked. More were seen on Saturday.

How did Sri Lanka get here?

Critics say the roots of the crisis, the worst in several decades, lie in economic mismanagement by successive governments that created and sustained a twin deficit - a budget shortfall alongside a current account deficit.

"Sri Lanka is a classic twin deficits economy," said a 2019 Asian Development Bank working paper. "Twin deficits signal that a country's national expenditure exceeds its national income, and that its production of tradable goods and services is inadequate."

But the current crisis was accelerated by deep tax cuts promised by Rajapaksa during a 2019 election campaign that were enacted months before the Covid-19 pandemic, which wiped out parts of Sri Lanka's economy.

With the country's lucrative tourism industry and foreign workers' remittances sapped by the pandemic, credit ratings agencies moved to downgrade Sri Lanka and effectively locked it out of international capital markets.

In turn, Sri Lanka's debt management programme, which depended on accessing those markets, derailed and foreign exchange reserves plummeted by almost 70% in two years.

The Rajapaksa government's decision to ban all chemical fertilisers in 2021, a move that was later reversed, also hit the country's farm sector and triggered a drop in the critical rice crop.

How Sri Lanka's economy spiralled into crisis

A severe shortage of foreign currency has left Rajapaksa's government unable to pay for essential imports, including fuel, leading to debilitating power cuts lasting up to 13 hours.

Ordinary Sri Lankans are also dealing with shortages and soaring inflation, after the country steeply devalued its currency last month ahead of talks with the International Monetary Fund (IMF) for a loan programme.

The island nation of 22 million people is in the midst of its worst economic crisis in years with rolling blackouts for up to 13 hours a day as the government scrambles to secure foreign exchange to pay for fuel imports

Police arrested 53 people and imposed a curfew in and around Colombo on Friday to contain sporadic protests that have broken out over shortages of essential items including fuel and other goods

On Thursday hundreds of protesters clashed with police and military outside President Rajapaksa's residence in a suburb of the capital, Colombo

A former Sri Lankan ambassador to the United States pleaded guilty on Friday to seeking to embezzle more than $330,000 during the purchase of a new embassy building in Washington.

Jaliya Chitran Wickramasuriya, 61, entered a guilty plea in US District Court to a charge of conspiracy to commit wire fraud, the Justice Department said.

Wickramasuriya, who served as Sri Lanka's envoy to the United States and Mexico from 2008 to 2014, sought to defraud the Sri Lankan government by inflating the price during the purchase of a new embassy building in 2013, the department said in a statement.

According to court documents, Wickramasuriya inflated the purchase price of the real estate by $332,027 and then had those funds diverted to two companies which had no role in the transaction.

Wickramasuriya later had the funds redirected back to Sri Lankan government accounts.

Sentencing was set for July 20. Wickramasuriya faces up to five years in prison and financial penalties.

Protestors hold banners and placards during a demonstration against the surge in prices and shortage of fuel and other essential commodities in Colombo

(Credit: AFP Photo)

Sri Lankan President says move in interest of public security, protection of public order and maintenance of supplies and essential services

Open Sesame | Sri Lanka crisis

Sri Lanka steps up security as anger over crisis boils over

SriLanka's capital was under heavy security on Friday after hundreds of protesters tried to storm the president's home in a night of violence and anger at a dire economic crisis.

The South Asian nation is seeing severe shortages of essentials, sharp price rises and crippling power cuts in its most painful downturn since independence in 1948. Many fear it will default on its debts.

Ex-Sri Lankan envoy to US pleads guilty to defrauding government

A former Sri Lankan ambassador to the United States pleaded guilty on Friday to seeking to embezzle more than $330,000 during the purchase of a new embassy building in Washington.Jaliya Chitran Wickramasuriya, 61, entered a guilty plea in US District Court to a charge of conspiracy to commit wire fraud, the Justice Department said.Wickramasuriya, who served as Sri Lanka's envoy to the United States and Mexico from 2008 to 2014, sought to defraud the Sri Lankan government by inflating the price during the purchase of a new embassy building in 2013, the department said in a statement.

Disaster tourism: Blackouts, shortages hit Sri Lanka recovery hopes

Electricity stoppages, petrol queues and escalating protests are threatening hopes that a tourism revival could help arrest the island nation's intensifying financial crisis.After being ravaged by civil war for decades the country's coconut palm-lined beaches and exotic wildlife more recently made it a popular stomping ground for both high-end globetrotters and budget travellers.Tourism became crucial to the economy -- its pandemic-enforced closure underlies the foreign exchange shortage that is the root cause of the current situation.

Amid violent protests, SL President urged to dissolve cabinet, form interim govt

Following violent protests nearSriLankaPresident Gotabaya Rajapaksa's house on Thursday night, 11 government-affiliated parties have urged him to immediately dissolve the Cabinet and form an interim government with the consent of all parties to resolve the ongoing economic crisis.

A protestor holds an oil lamp during a demonstration against the surge in prices and shortage of fuel and other essential commodities in Colombo

Sri Lanka declares state of emergency after unrest

SriLankaPresident Gotabaya Rajapaksa Friday declared a state of emergency giving security forces sweeping powers a day after hundreds of people tried to storm his residence amid an unprecedented economic crisis.

Sri Lanka's January trade deficit stood at $859 million

SriLanka's January trade deficit stood at $859 million, the country's central bank said in a statement on Friday.

The island nation's January imports rose 23.1% to $1.96 billion, while exports rose 17.5% to $1.10 billion, according to the statement.