Sri Lankan president digs in heels, expands cabinet ahead of IMF talks

Prime Minister Mahinda Rajapaksa became the only member of the family to retain a Cabinet position

Sri Lanka's President Gotabaya Rajapaksa announced 17 new ministerial appointments on Monday - but notably left out some members of his own family in the wake of protests over the government's handling of a devastating economic crisis.

The president and his elder brother, Prime Minister Mahinda Rajapaksa, will stay on despite demands from protesters and the opposition for them to quit. Rajapaksa has governed the South Asian island nation since 2019 with numerous other family members in top government positions.

The island nation of 22 million is experiencing prolonged power cuts and fuel and medicines shortages triggered by a tumble in its foreign exchange reserves that has stalled imports of essentials, leading to daily protests in the commercial capital Colombo.

Also Read — Sri Lanka's reluctance to tap IMF helped push it into an economic abyss

The government is set to begin talks with the International Monetary Fund (IMF) on Monday for a loan programme, and analysts have flagged political instability as a risk to Sri Lanka finding a way out of its financial turmoil.

In a speech to his new cabinet, President Rajapaksa said he would seek solutions to Sri Lanka's problems including via possible constitutional changes, according to a statement issued by his office.

"I stand ready to support parliament on constitutional changes that should be made," he said.

Thousands of Sri Lankans have been protesting outside the president's office in Colombo for over a week, demanding that the Rajapaksas resign.

Faced with growing popular unrest Rajapaksa dissolved his previous cabinet earlier this month and invited all parties in parliament to form a unity government, but opposition groups and members of the ruling alliance rejected the idea.

On Monday only five members of the previous cabinet were sworn in again, while most other portfolios were allocated to members of the ruling Sri Lanka Podujana Peramuna party.

Among those not re-appointed from the previous cabinet were two more of the president's brothers, Basil and Chamal, and the prime minister's son Namal.

"It is the government's responsibility to put the economy on the right path and build a country that can achieve the aspirations of the younger generation," the president said.

Economic mismanagement by successive governments weakened Sri Lanka's public finances, but the situation was exacerbated by deep tax cuts enacted by the Rajapaksa administration soon after it took office in 2019.

Key sectors of the economy, particularly tourism, were then battered by the Covid-19 pandemic, while the government dragged its feet on approaching the IMF for help.

Last week, the country's central bank said it was unilaterally suspending external debt payments, instead using the paltry foreign reserves of around $1.93 billion for importing essential goods.