Sri Lanka’s new government plans to sell its national airline to stem losses, part of efforts to stabilize the nation’s finances even as authorities are forced to print money to pay government salaries.
The new administration plans to privatize Sri Lankan Airlines, Prime Minister Ranil Wickremesinghe said in a televised address to the nation on Monday.
The carrier lost 45 billion rupees (US$128.83 million) in the year ending March last year, he said, just days before the nation is to default on foreign debt.
Photo: EPA-EFE
“It should not be that this loss has to be borne by the poorest of the poor who have not set foot in an aircraft,” Wickremesinghe said.
Wickremesinghe — less than a week into the job — said he is forced to print money to pay salaries, which would pressure the nation’s currency.
The nation has only one day’s stock of gasoline and the government is working to obtain US dollars in the open market to pay for three ships with crude oil and furnace oil that have been anchored in Sri Lankan waters, he said.
“The next couple of months will be the most difficult ones of our lives,” Wickremesinghe said. “We must immediately establish a national assembly or political body with the participation of all political parties to find solutions for the present crisis.”
The prime minister pledged to announce a new “relief” budget to replace Sri Lankan President Gotabaya Rajapaksa’s “development” budget that helped stoke Asia’s fastest inflation rate.
The Cabinet is to propose that the Sri Lankan Parliament increase the treasury bill issuance limit to 4 trillion rupees from 3 trillion rupees, Wickremesinghe said, forecasting a budget deficit of 13 percent of GDP for the year ending in December.
Wickremesinghe’s appointment last week followed violent clashes between government supporters and protesters demanding Rajapaksa’s resignation. He has yet to appoint a minister of finance to lead bailout talks with the IMF, and is seeking bridge loans from nations, including India and China.
However, it is unclear if the government can get the cash in the absence of a full Cabinet.
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