COLOMBO, Sri Lanka—Sri Lanka’s usable reserves have dropped to levels of about USD 150 million.
Acute shortages of essentials ranging from fuel to medicine have become prevalent.
Increasing public discontent amidst increasing prices and shortages has led to large protests all across the country. The country has reached a position where the country is unable to import essential fuel without the help of credit lines from bilateral partners. As the crisis reaches such depths the government and the administration have failed to come up with a credible economic plan capable of taking Sri Lanka out of a fully blown out economic collapse.
At such a crucial juncture, a group of independent economists have launched an emergency plan of action with the aim of stopping further collapse of the economy and to stabilize over the medium-term.
The independent group of economists highlight that macroeconomics risks will continue to worsen if immediate action is not taken.
“Sri Lanka has run dangerously low on foreign reserves and faces the spectre of a ‘disorderly default’ on its debt obligations. Although a default may cause legal complications in debt restructuring negotiations and reputational damage for the future, much of the economic consequences of a sovereign default are already here. “
Therefore the group of economists urge the government to take the necessary steps to achieve this outcome immediately. Key signatories of the emergency plan further argue that a staff-level “agreement with the IMF can establish market confidence and help unlock bridge financing.
The independent economists who are signatories to the document are Aneetha Warusavitarana, Anushka Wijesinha, Asanka Wijesinghe, Chayu Damsinghe, Daniel Alphonsus, Deshal de Mel, Naqiya Shiraz, Rehana Thowfeek, Shiran Fernando, Thilina Panduwawala and Umesh Moramudali.
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