Sri Lanka holds its breath as new premier fights to save the economy

It has been more that three weeks since Ranil Wickremesinghe took over as prime minister of Sri Lanka with a daunting mandate to pull the crisis-weary country from the brink of an economic abyss that threatens to tear it apart.

The five-time prime minister has inherited a nation barreling toward bankruptcy and saddled with foreign debt so big that it has no money left for basic imports. Sri Lankans are struggling to access the bare necessities like food, fuel, medicine, cooking gas and even toilet paper and matches.

In his new job, Wickremesinghe left little doubt about what lies ahead. “The next couple of months will be the most difficult ones of our lives,” he told the nation fed up with long lines, sky-rocketing inflation and daily protests that seem to be getting out of control.

“We must prepare ourselves to make some sacrifices and face the challenges of this period.”

Since the May 17 televised speech, the seasoned politician, who also serves as the finance minister, has begun difficult negotiations with financial institutions, lenders and allies, and United Nations agencies to fill the coffers and give some relief to impatient citizens.

He has taken necessary steps like raising taxes and has pledged to overhaul government that concentrates power under President Gotabaya Rajapaksa, a model that many believe exacerbated the crisis.

He took over after days of violent protests last month forced his predecessor, President Rajapaksa's brother Mahinda, to step down and seek safety from angry crowds at a naval base.

Time may not be on his side as reforms are slow and people want results now. He's also a one-man party in Parliament — the only lawmaker from his party to hold a seat after it suffered a humiliating defeat in a 2020 election.

“A person who doesn't have a political base has an unprecedented crisis to manage,” said Dayan Jayatilleka, a former diplomat and political analyst.

Lines to buy fuel and cooking gas have stretched miles every day, snaking around blocks, with Sri

Lankans weathering heavy rains and scorching heat to buy essential items that cost three times what they used to. Often, they have to wait days, and many still end up empty-handed.

Jagath Chandana, 43, had been waiting in line on the outskirts of the capital, Colombo, with a canister to buy cooking gas for two days. “It has been crazy. We are totally helpless. It seems even Ranil can't resolve the crisis. They (politicians) just talk but on the ground level, people are suffering,” he said.

For over 50 days, protesters have camped outside Rajapaksa's office demanding he step down.

They say economic mismanagement, policy blunders like a hasty ban on imported chemical fertilizers that devastated crops, and a government stocked with Rajapaksa relatives caused the crisis. At their peak in power, six Rajapaksas occupied government posts — the crisis has seen the exit of all except one. The other five still remain as lawmakers.

Sri Lanka has suspended repayment of nearly $7 billion in foreign debt due this year. It owes $26 billion through 2026 out of a total of $51 billion.

Foreign currency reserves have diminished to just two weeks' worth of imports while Wickremesinghe prepares to obtain a bailout package from the International Monetary Fund.

He has said any bridge financing will depend on an IMF agreement and he was hopeful that negotiations would finish by the end of June.

The government is targeting $5 billion for repayments and another $1 billion to pad up the country's reserves, Wickremesinghe said recently.

In such a volatile situation, Wickremesinghe has been able to bring some transparency and rationality that was lacking in the previous administration run by the Rajapaksa clan, Jayatilleka said.

But analysts also say it will be difficult for him to deliver on some of the challenges, especially as he also faces a messy battle to overhaul the constitution and strengthen the powers of Parliament to bring in much-needed reforms.

“His proposals are good for medium and long term. But people want immediate changes to take place and that they don't see,” said political analyst Jehan Perera.