Sri Lanka's Independence Day Celebrations Host Thai Prime Minister Amid Economic Crisis

Economic Challenges Overshadow Sri Lanka's Independence Day Festivities, Thai PM Attends as Guest of Honor

Feb 4, 2024 - 06:56
Feb 4, 2024 - 06:56
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Sri Lanka's Independence Day Celebrations Host Thai Prime Minister Amid Economic Crisis
Sri Lanka's Independence Day Celebrations Host Thai Prime Minister Amid Economic Crisis

Sri Lanka marked its 76th Independence Day with Thai Prime Minister Srettha Thavisin as the distinguished guest of honor, amidst the country grappling with its most severe economic crisis. The event, held at a modest ceremony near the main seaside esplanade, featured a military parade and parachute jumps, attended by Srettha and Sri Lankan President Ranil Wickremesinghe.

The Independence Day celebrations, commemorating Sri Lanka's liberation from British rule in 1948, took place against the backdrop of the nation's financial challenges. In April 2022, Sri Lanka declared bankruptcy with a staggering debt exceeding $83 billion, over half of which is owed to foreign creditors. The economic turmoil triggered a political crisis, leading to the resignation of then-President Gotabaya Rajapaksa, with Wickremesinghe succeeding him.

Prime Minister Srettha's visit to Sri Lanka coincided with the signing of a free trade agreement between the two nations, aimed at fostering trade and investment. President Wickremesinghe acknowledged the significant strides made in economic stabilization and sought Thailand's assistance in rejuvenating the battered economy and restoring international confidence.

Facing a shortage of foreign currency needed for essential imports, Sri Lanka suspended debt repayment in 2022, triggering street protests that resulted in a change in leadership. The International Monetary Fund approved a four-year bailout program in March to address the economic challenges.

Under President Wickremesinghe, Sri Lanka has seen improvement, with reductions in severe shortages of food, fuel, and medicine. However, public discontent has risen due to the government's measures to increase revenue, including raising electricity bills and imposing substantial new income taxes on professionals and businesses – steps taken to meet IMF conditions.

As Sri Lanka seeks to restructure $17 billion of its outstanding debt, agreements with some external creditors have already been reached, indicating ongoing efforts to stabilize the nation's financial situation.

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