Sri Lanka’s economic instability caused by government infighting, says Mahinda Rajapaksa

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Former Sri Lankan president Mahinda Rajapaksa. (PTI Photo)

Sri Lanka’s economic and political stability has been affected due to infighting between President Maithripala Sirisena and Prime Minister Ranil Wickremesinghe, former president Mahinda Rajapaksa claimed on Saturday.

“This is because the president and prime minister are clashing. They clash in the open. As long as instability prevails no investor will come,” Rajapaksa said.

He was referring to the Sri Lankan rupee hitting an all-time low this week against the US dollar, reaching near the 170 mark. “When we left (in 2015) the dollar was 131.40,” the former president said.

As a result of the rupee’s depreciation, Sri Lanka’s external debt had jumped, he said. “In 2014 (his last year) the external debt was Rs 7,391 billion or 71 per cent of the GDP. Now it has risen to 87 per cent. Interest payment was Rs 443 billion and now it has risen to Rs 820 billion, almost doubled”.

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Rajapaksa said if he was in power he would have better managed the currency issue. He charged that the government has run short of ideas as to how to manage the economy.

“Hold elections and give us power we will show you how. I have proved myself before,” he said.

Finance Minister Mangala Samaraweera said earlier in the week that the government could have sold its reserves to defend the rupee if “not for the humongous Rajapaksa debt trap”.

He said the loan repayments both in 2019 and 2020 would be USD 4.5 billion each and 80 per cent of these are loans taken during Rajapaksa’s term.

Samaraweera claimed the Sri Lankan rupee had depreciated by just 7.4 per cent in the first nine months of the year, while the Indian rupee had depreciated by over 13 per cent.

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