Under a lot of debt, Sri Lanka held a military parade on Tuesday to celebrate its 77th independence day from Britain. The country’s newly elected president, Anura Kumara Dissanayake promised to resolve the country’s economic crisis before the conclusion of his five year tenure on Independence day.
Sri Lanka which gained independence from Britain in 1948 faced its worst economic crisis in 2022 and the crisis made the island nation declare bankruptcy. It also suspended repayments on approximately $83 billion in domestic and foreign debts due to a foreign exchange crisis that resulted in severe shortages of food, medication, gasoline and cooking gas as well as hours-long power outages.
The economic crisis triggered political instability eventually paving the way for Dissanayake’s party to take office four months ago. On Tuesday, Dissanayake stated that throughout his tenure, he will raise the living conditions of all Sri Lankans by providing them with the opportunity to benefit from current scientific and technological breakthroughs.
At a ceremony in the capital, Colombo, he urged Sri Lankans to fight together to achieve economic, social and cultural independence stating, “Everyone has a role to play in this struggle.” A military parade followed Dissanayake’s speech.Under Dissanayake’s leadership, Sri Lanka is attempting to recover from bankruptcy by restructuring its massive debt.
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When Sri Lanka filed for bankruptcy, it turned to the International Monetary Fund for assistance. In 2023, the IMF authorised a $2.9 billion bailout package that required Sri Lanka to restructure its debt over four years. Following agreements with bilateral and multilateral creditors as well as holders of private bonds, Sri Lanka said in September that the debt restructuring process was complete.
Sri Lanka is requesting debt servicing relief totalling $17 billion. Economic mismanagement, the COVID-19 pandemic’s aftermath and the 2019 terrorist attacks that decimated Sri Lanka’s vital tourism sector were the main causes of the country’s crisis. The pandemic also interfered with Sri Lankan’s ability to send money home from their jobs overseas.
