Sri Lanka's President Resigns Following National Bankruptcy

Sri Lanka’s President Resigns Following National Bankruptcy

He announced his intention to resign through the Speaker of the National Assembly and decided to leave on the 13th. GDP in the first quarter shrank and prices soared by 54.6% in June. Declared bankruptcy at the first default in May.

In Sri Lanka, which declared bankruptcy following default (default), political turmoil grew out of control, making economic recovery far more difficult. The president took responsibility and stepped down, but nothing has changed right now.

According to the Wall Street Journal (WSJ) on the 9th (local time), Sri Lankan National Assembly Speaker Mahinda Yappa Abeiwardena said in a statement that “President Rajapaksa has announced his intention to resign for a peaceful transfer of power.” President Rajapaksa will step down on the 13th.

Sri Lanka has grown by double digits in the past few months the situation was unsettled due to the rising inflation rate, large-scale blackouts due to power shortages, and severe shortages of oil and pharmaceuticals. Cars without fuel lined up at gas stations, and authorities have imposed gas supply restrictions and school closures.

In May, it went into default for the first time in history, and the government eventually declared bankruptcy. Protests took place all over the country, and finally, tear gas and water cannons appeared in the capital city of Colombo, raising protests from citizens.

The subsequent bailout negotiations with the International Monetary Fund (IMF) seldom reached an agreement, causing the public to lose their patience. “The bailout negotiations are more complicated and difficult than before because Sri Lanka is a default country,” Prime Minister Ranil Wickremesinghe said in a meeting with lawmakers this week. And this time, the situation is different from all the previous cases.”

Eventually, as protesters stormed into the president’s home and office, the president decided to resign. Prime Minister Wi Kre Messinghe also stepped down as prime minister shortly before news of his resignation came. The prime minister’s residence has already been burned by protesters.

President Rajapaksa served as President of Sri Lanka from 2005 to 2015, focusing on large-scale infrastructure construction. At the time, he borrowed significant amounts of money from China, accelerating economic growth. After that, he succeeded in re-electing in 2019, but the new coronavirus infection (COVID-19), the Ukraine war, and the resulting global inflation increased economic instability, resulting in economic instability.

As the original president’s term of office lasted until 2024, National Assembly Speaker Abeiwardena is expected to act as an interim acting president.

The president has stepped down, but there are no major changes to be expected right away. Protests and IMF negotiations are still ongoing. In the first quarter, gross domestic product (GDP) grew by 1.6% compared to the same period of the previous year, and consumer price inflation rose 54.6% in June, exacerbating economic instability.

U.S. ambassador to Sri Lanka Julie Chung urged citizens to organize protests on Twitter, saying “chaos and armed conflict will not improve the current economy or bring political stability to Sri Lanka.”