Country needs $ 6 billion for the next 6 months: Sri Lankan PM

Colombo: The Sri Lankan prime minister on Tuesday said that the United Nations had appealed to the world community to help the island nation meet its acute shortage of food, fuel and medicine. The estimated funding however would not be enough as it is expected that the county would require more than $ 6 billion to carry along the next six months.

According to a speech made by the Prime Minister Ranil Wickremesinghe to the Parliament, $48 million assistance has been promised by the U.N. over a four-month period.

Wickremesinghe urged people to refrain from non-essential travel reminded people that it would be difficult to get some essentials for the next three weeks. He also asked people to stand united and be patient, and to use sparse supplies as carefully as possible.

"Therefore, I urge all citizens to refrain from thinking about hoarding fuel and gas during this period. After those difficult three weeks, we will try to provide fuel and food without further disruptions. Negotiations are underway with various parties to ensure this happens," Wickremesinghe said.

The island country is on the verge of bankruptcy and has suspended repaying of foreign loans. The country's foreign reserves are depleted, which limited imports and has led to severe shortages of essential commodities, including food, medicine, and fuel and cooking gas.

Of the $ 25 billion in foreign debt owed by 2026, $ 7 billion will have to be repaid this year. Sri Lanka's total foreign debt amounts to $ 51 billion.

Wickremesinghe said that authorities have begun talks with the International Monetary Fund for a bailout package, and added that he has urged the IMF to lead a conference to unite Sri Lanka's lenders.

"Holding such a conference under the leadership of India, China and Japan will be a great strength to our country. China and Japan have different credit approaches. It is our hope that some consensus on lending approaches can be reached through such a conference," Wickremesinghe said.

Last year's decision to ban imported agrochemicals and implement organic farming has halved the production of rice during the main growing season. Despite the ban being lifted, there is a fear that the food crisis would worsen and threaten future harvests as there is a lack of funds to buy fertilizer.

The Prime Minister said that imports of fertilizers cost $ 600 million a year and $ 150 million a month would be required to import food. It will take another $ 1 billion to strengthen the local currency. A total of $ 6 billion will be needed for the country to stay afloat for the next six months, the Indian Express has reported.

"The task of rebuilding our declining agriculture must begin immediately. We are losing the international market for our export crops. Action must be taken to prevent this. Chemical fertilizers are needed to boost local agriculture," he said.

The previous government, according to Wickremesinghe, had alienated the country's long-time allies even before he took oath as the Prime Minister.

"Japan is our long-time friend. A nation that has helped our country greatly. But they are now unhappy with us due to the unfortunate events of the past," Wickremesinghe said. "Our country failed to formally notify Japan of the suspension of certain projects. Sometimes the reasons for these suspensions were not even stated."

"Despite alienating these friendly nations, India offered to help us in the face of the growing crisis. We express our respect and gratitude to them during this difficult time. We are also working to re-establish old friendships with Japan," he said.

Since the beginning of the crisis, India has provided billions of dollars in aid to Sri Lanka through loans and credit lines.

Manusha Nanayakkara, the Sri Lankan Foreign Employment Minister said the government was planning to send a section of their state workers abroad to work in order to help replenish much-needed foreign currency. Laws are also being formulated by the health ministry to aid state health workers seek employment abroad.

Sri Lanka's major economic lifelines were remittances from foreign workers, along with garment exports and tourism, but due to authorities artificially maintaining the value of the US dollar and forcing foreign currency to be converted into local currency, those revenues fell sharply and resulted in many people using illegal channels to transfer money.

Sri Lanka normally received $700 million per month in remittances from expatriate workers Nanayakkara said, but in March it dropped to $ 230 million.

The financial crisis led to political conflict. Protesters have been camping outside the president's office for more than 50 days, demanding the resignation of President Gotabhaya Rajapaksa, whom they blame for the crisis.

Large scale protests from the people have shaken the political dynasty of the powerful Rajapaksa family. The president's brother has resigned as prime minister last month amid protests. Earlier this year, three other family members have resigned from their cabinet positions.