Parliament Speaker former President Mohamed Nasheed has taken up the task of seeking out finances to resolve the financial crisis in Sri Lanka.
Sri Lanka’s newly appointed Prime Minister Ranil Wickremesinghe tasked the Speaker to coordinate relief efforts for the country internationally. This move came after the country defaulted on its debts for the first time in its history. The governor of Sri Lanka's central bank said the country was now in a "pre-emptive default".
The decision came after discussions between the Prime Minister and the Speaker in Colombo on Thursday. Speaker Nasheed, the Prime Minister’s Office reported, had generously offered to assist Sri Lanka in securing relief from foreign nations.
This is the first time Nasheed had tackled the debt of any country – including his own. During his presidency, Nasheed, after multiple travels abroad would boast of securing millions. However, those millions are yet to be seen.
Mere days after taking office, Nasheed had also contacted the US embassy in Sri Lanka and requested for around US$ 10 million. This is a complete violation of diplomatic relations and norms. The Ambassador at the time, Robert Blake had inquired why Nasheed had not sought out this amount from International Monetary Fund (IMF) as was the norm. He also said the call came at second last working day in November and it would be near impossible to secure that at the time.
Nasheed’s short term in office was marked by economic difficulties, with a currency that was losing its value quickly. The dollar was pegged at 15.42 during his tenure.
The country's economy has been hit hard by the pandemic, rising energy prices, and populist tax cuts. A chronic shortage of foreign currency and soaring inflation had led to a severe shortage of medicines, fuel and other essentials. Sri Lanka has defaulted on its debt for the first time in its history as the country struggles with its worst financial crisis in more than 70 years. It comes after a 30 day grace period to repay $78 million of unpaid debt interest payments expired on Wednesday.