Sri Lanka is suffering through both an economic and energy crisis, with foreign exchange reserves at a record low and fuel supplies set to run out at any moment.
, which provides people with a weekly quota based on the number plates of registered vehicles.
Last week, President Gotabaya Rajapaksa finally resigned and fled the country after months of protests. The UN now hopes a peaceful transition of power will help rebuild confidence in the state. Business confidence in Sri Lanka is extremely low at present, according to the chairman of the Ceylon Chambers of Commerce Vish Govindasamy. He, “Business confidence is probably at its lowest since I’ve been in business. It’s probably the most difficult times that we have faced. But we are resilient.
As well as establishing a new government and financial reforms, Sri Lanka will have to seek help from neighboring countries if it hopes to alleviate its financial situation. To improve its debt restructuring problem it will have to ask for support from China to provide debt relief and help speed up the process.
China has already invested billions in Sri Lanka for its Belt and Road Initiative, meaning that it is in its interest to help the country rebuild its economy.
Support from China and India, as well as the swift formation of a government with new financial reforms, could help Sri Lanka to get a much-needed bailout from the IMF to begin to rebuild its economy. Deborah Brautigam, a professor from Johns Hopkins University,, “The IMF cannot… interact with the government when things are in a continuing crisis mode. So, until the government stabilizes, until they have a minister of finance, there’s no one for the IMF to talk with.
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