Sri Lanka Cabinet Offers To Resign As Out-Of-Control Inflation Sparks Widespread Social Unrest
Update (1535ET): Bloomberg reports that Sri Lanka’s cabinet has submitted its resignation, a ruling party member said, amid rising public anger about the government’s economic policies that have led to soaring living costs and a foreign exchange crisis.
“We gave resignations to the Prime Minister saying we are willing to leave at any time,” Education Minister Dinesh Gunawardena told reporters in Colombo late Sunday.
“After discussing with the President the steps to be taken will be decided.”
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As we detailed earlier, the tiny island nation of Sri Lanka is experiencing worsening shortages of food, fuel, and medicine amid a foreign exchange crisis. A 36-hour curfew went into effect this weekend as mass anti-government protests over soaring living costs are underway.
Bloomberg reports that President Gotabaya Rajapaksa imposed a state of emergency on Friday after soaring inflation and widespread rolling blackouts for up to 13 hours a day resulted in protests in the capital and at the president’s private home. The emergency order gives authorities sweeping powers to detain and quell protests to restore public order.
Days ago, the Washington, D.C.-based International Monetary Fund (IMF) swooped in and initiated talks with Sri Lankan authorities on a rescue loan. Rajapaksa will fly to Washington for additional discussions with IMF officials.
A confluence of factors drained the South Asian island nation’s foreign exchange reserves by more than 70% since the virus pandemic began, including the collapse in tourism and poorly timed tax cuts.
Bloomberg explains more about the socio-economic crisis unfolding on the island nation of 22 million people.
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