Sri Lanka proposes to privatize the national airline in the midst of crisis | Business

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COLOMBO, Sri Lanka (AP) — Sri Lanka’s new prime minister on Monday proposed privatizing the country’s money-losing national airline as part of reforms aimed at solving the country’s worst economic crisis in decades.

Prime Minister Ranil Wickremesinghe said in a message to the people that he plans to come up with a special relief budget that will replace the development-focused budget approved earlier for this year. He said he would channel funds previously allocated for infrastructure development to the public. welfare.

He said the country’s financial health is so bad that the government has been forced to print money to pay civil servants’ salaries and buy other goods and services.

President Gotabaya Rajapaksa appointed Wickremesinghe as prime minister last Thursday in a bid to ease the island nation’s political and economic crisis.

The president’s brother, Mahinda Rajapaksa, resigned as prime minister on May 9 amid violence that left nine people dead and more than 200 injured. The protesters demanded the resignation of the powerful Rajapaksa family to take responsibility for leading the country into economic crisis.

For months, Sri Lankans have been forced to wait in long queues to buy scarce imported necessities such as medicine, fuel, cooking gas and food due to a severe shortage of foreign currency. Government revenues have also fallen.

Wickremesinghe said Sri Lankan Airlines lost about $123 million in the 2020-21 financial year, which ended in March, and its total losses exceeded $1 billion in March 2021.

“Even if we privatize Sri Lankan Airlines, it is a loss that we have to bear. You must be aware that it is a loss that must be borne even by the poor people of this country who have never set foot in a plane,” Wickremesinghe said.

Sri Lanka is on the brink of bankruptcy and has suspended repayment of about $7 billion in foreign loans due this year out of the $25 billion to be repaid by 2026. The country’s total external debt is $51 billion. of dollars. The Ministry of Finance says the country currently has only $25 million in usable foreign exchange reserves.

Wickremesinghe said around $75 billion was urgently needed to help provide people with essential items, but the country’s treasury is struggling to come up with even $1 billion.

Drug shortages are so severe that it is difficult to buy rabies drugs and drugs to treat heart disease, he said.

“I have no desire to hide the truth and lie to the public. Although these facts are unpleasant and terrifying, this is the real situation. For a short time, our future will be even more difficult than the difficult times we went through,” Wickremesinghe said.

“We are going to face considerable challenges and adversity. However, this period will not be long,” he said, adding that the countries he spoke with pledged to help in the coming months.

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