In a desperate move to prepare for a severe fuel shortage that is expected to last for days, Sri Lankan authorities on Friday closed schools and asked public officials not to come to work amid the nation's worst economic crisis in decades.
The Public Administration Ministry asked the public officials – except for those who maintain essential services – to stay home from work Friday “in a view of current fuel shortage and issues in transport facilities” across the country.
State and government-approved private schools also closed Friday amid the worsening fuel shortage, with thousands of people waiting in queues at fuel stations across the country for days at a time.
Sri Lanka is now almost without gasoline and faces an acute shortage of other fuels as well.
The government has been struggling to find money to pay for the importation of fuel, gas and other essentials in recent months as the Indian Ocean island nation is on the brink of bankruptcy.
Its economic woes have brought on a political crisis, with the government facing widespread protests.
President Gotabaya Rajapaksa swore in nine Cabinet ministers Friday, raising the total number to 13 as he attempts to stabilize the government after a string of resignations.
Appointments included the critical health, trade and tourism ministries. But Rajapaksa did not name a finance minister and the portfolio is likely to be retained by Wickremesinghe.
The new ministers include four independent lawmakers, three from the ruling party and two from the main opposition party. Four ruling party lawmakers were appointed as Cabinet ministers last week.
Rajapaksa sought a unity government in early April but the largest opposition political party, the United People’s Force, had rejected the proposal.
For months, Sri Lankans have endured long lines to buy those essentials, most of which come from abroad. Shortages of hard currency have also hindered imports of raw materials for manufacturing and worsened inflation.
Protesters blocked main roads to demand gas and fuel, and television stations showed people in some areas fighting over limited stocks.
Authorities have announced countrywide power cuts of up to four hours a day because they can’t supply enough fuel to power generating stations.
Sri Lanka has suspended repayment of about $7 billion in foreign loans due this year out of $25 billion to be repaid by 2026. The country’s total foreign debt is $51 billion. The Ffinance Ministry says the country currently has only $25 million in usable foreign reserves.
Protesters have occupied the entrance to the president’s office for more than a month, calling for Rajapaksa to resign.
Months of anti-government rallies have led to the near-dismantling of the once-powerful ruling family, with one of the president’s brothers resigning as prime minister, and other siblings and a nephew leaving their Cabinet posts. Protesters accuse the Rajapaksas of triggering the crisis through corruption and misrule.
Sri Lanka's new Prime Minister Ranil Wickremesinghe said Monday that about $75 billion is needed urgently to help provide essential items, but the country’s treasury is struggling to find even $1 billion.
Attacks by Rajapaksa’s supporters on protesters last week sparked nationwide violence that left nine people – including a lawmaker – dead, and more than 200 injured. Homes of lawmakers and their supporters were burned down.
G-7 economic powers support efforts to provide debt relief for Sri Lanka, group finance chiefs said on Thursday in a draft communique from a meeting in Germany after Sri Lanka defaulted on its sovereign debt.
Central bank chief P. Nandalal Weerasinghe has said plans for debt restructuring were almost finalized and he would be submitting a proposal to the Cabinet soon.
"We are in pre-emptive default," he said. "Our position is very clear, until there is a debt restructure, we cannot repay."
The governor said on Thursday that foreign exchange had been secured from a World Bank loan and remittances to pay for fuel and cooking gas shipments, but supplies are still to flow through.
Inflation could rise to a staggering 40% in the next couple of months but it was being driven largely by supply-side pressures and measures by the bank and government were already reining in demand-side inflation, the governor said.
Inflation hit 29.8% in April with food prices up 46.6% year-over-year.
A spokesperson for the International Monetary Fund (IMF) said it was monitoring developments very closely and that a virtual mission to Sri Lanka was expected to conclude technical talks on a possible loan program on May 24.
