Colombo, Sri Lanka – Ranil Wickremesinghe, the newly appointed prime minister of crisis-hit Sri Lanka, has said he is confident he can turn the economy around – but cautioned it will take 18 months before stability returns.
“The year 2023 is going to be difficult, but by 2024 things should pick up,” Wickremesinghe told Al Jazeera last week [Thursday] in a wide-ranging interview at his official residence in the capital, Colombo.
The 73-year-old leader, who in May became prime minister for the sixth time, said that he took up the job under extraordinary circumstances.
“We had nearly two days without a government; things were getting out of hand,” he said, recalling the mass protests over shortages of fuel and electricity that forced Mahinda Rajapaksa, his predecessor and the brother of President Gotabaya Rajapaksa, to resign.
“I thought ‘the situation is bad, it’s your country, so you can’t be wondering whether you are going to succeed or not. You take it over and work to succeed,’” said Wickremesinghe, who met the president at the request of some MPs from the ruling Sri Lanka Podujana Peramuna party.
“I have confidence I can turn the economy around,” he said.
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The island nation of 22 million has been brought to a virtual standstill due to acute shortages of fuel and essential items such as food and medicines, as the government ran out of foreign reserves to import commodities earlier this year.
Sri Lanka defaulted on its external debt in April and the usable foreign reserves are so low that it has struggled to cover its needs from the international market.
In Colombo, the roads are nearly empty. Some long queues can be seen near the few petrol stations that are still open, but educational institutions, businesses and government offices remain shut. Hotels in the capital – once full of tourists – are struggling to stay afloat due to a sharp drop in guests.
Worst crisis since independence in 1948
Wickremesinghe, who has been tasked with lifting the country out of its worst crisis since independence in 1948, said there will be petrol shortages until at least July 22, when the next shipment is expected.
“We are buying fuel either using Indian credit lines or the foreign exchanges that we get from remittances. It’s [remittances] a small amount, but nevertheless, sometimes we get a billion dollar[s] or a billion and a half. The rest of the reserves from what we got from the creditors have already been busted,” he said.
President Gotabaya Rajapaksa, right, greets Prime Minister Ranil Wickremesinghe during the latter’s oath-taking ceremony on May 25 [Sri Lankan President’s Office via AP]
Food inflation has risen to nearly 60 percent, while the crashing of the Sri Lankan rupee by more than 80 percent since March has further eroded people’s purchasing power.
Last month, the prime minister said the economy had “collapsed”.
“It’s a big setback to the economy and caused lot of hardship to the people … We have been taking steps … especially to get gas, which will be available in the next few days,” he told Al Jazeera, adding supplies of diesel and furnace oil have also been made.
“The issue has been petrol … and that will take a bit of time.”
Furthermore, the prime minister added that a gas deal has been secured, with most of the funding coming from the World Bank, which will ensure supplies for the next four months.
Sri Lanka has held talks with the International Monetary Fund (IMF) and the World Bank as it seeks to overcome the financial upheaval brought by decades of import-oriented policy, as well as economic mismanagement – including an ill-thought-out ban on fertilisers and tax holidays for corporations and the wealthy, under the government dominated by the Rajapaksa family.
“We seem to have come to an agreement with IMF at the staff level. And this is needed to stablise the economy,” Wickremesinghe said, adding he would reveal further details in parliament this week.
The prime minister also said his government was planning to bring in an interim budget, most probably in August.
Calls for political reforms
Meanwhile, protesters have been camping at the Galle Face in Colombo since April and demanding the removal of President Gotabaya Rajapaksa, blaming him and his elder brother, Mahinda Rajapaksa, for bringing the economy to the ground.
They also call for the removal of the executive presidency as part of the push for political reforms.
Wickremesinghe said that he backed the protesters’ demand for a change in the political system.
“I do not think protesters have very many demands; they just want a change,” he said. “It’s not just about abolishing the executive presidency. How do you make the parliament strong?”
“Young people … feel that they have been left out by the present system and that’s a valid point that they have made and parties have to open up,” Wickremesinghe added. He said that young people need to be given a platform to get into politics so that they will be able to shape the future of the country.
“I have made some proposals regarding the change in parliamentary structure, and referred it to the former Speaker Mr Karu Jayasuriya; his report is available, both will be tabled in parliament, most probably on Wednesday,” Wickremesinghe said.
He has proposed increasing oversight of the parliament and involvement of parties in governance.
The veteran leader, who is seen as having good ties with the West, said he had been trying to get the support of a diverse group of countries, including India, China, Japan, the United States and the United Kingdom, as well as from European Union member states.
“The main players are Japan, India and China. Japan has expressed interest in having Tokyo as a meeting place for a donor conference,” the prime minister said.
“This will be a unique conference,” he said on the participation of two members of the QUAD – India and Japan – and China, which runs the global infrastructure project the Belt and Road Initiative.
“So it will be a geopolitical conference of interest,” he said, adding that he has been talking to both India and China – regional rivals who have jostled to get a foothold in Sri Lanka.
‘India has always been a major player’
India has provided Sri Lanka with much-needed credit lines to buy fuel.
“India has always been a major player. They can’t have instability at their doorstep. Instability in Sri Lanka is not in India’s interest,” Wickremesinghe said.
Some foreign policy analysts, however, have pointed out that China, Sri Lanka’s third-biggest lender, has been slow to respond to the crisis in the island nation. They say Beijing is upset because the Rajapaksa government cancelled infrastructure projects last year by Chinese companies.
Protesters have been demanding the removal of President Gotabaya Rajapaksa, blaming him for the economic collapse [Navesh Chitrakar/Reuters]
But Wickremesinghe denied any tension in the ties with China.
“I have been talking to China ever since I took over. Contracts with Chinese companies were cancelled, but the previous government cancelled contracts with Japanese companies, MCC [Millennium Challenge Corporation] and contracts with India. So in a way, the former government has been even-handed,” he said, with a wry smile. MCC is a programme run by the US government through which it grants funds to countries for infrastructure projects.
The prime minister also commented on the recent controversy over the awarding of a wind energy project to the Indian conglomerate Adani Group.
“Adani has been here for a while. They actually came here first on this East Terminal issue where Japan and India got together, and Indians nominated Adani. But the then-government cancelled it. Unlike the Japanese who went home, Adani stayed. He [Adani] got hold of John Keells and got the West Terminal. So, he knows how to invest in Sri Lanka.
“He [Adani] doesn’t need to ask [Indian] Prime Minister [Narendra] Modi,” he said over allegations that Modi pressured Gotabaya Rajapaksa to award the wind energy project in favour of Adani, who is seen as close to the Indian prime minister.
“I have seen the proposal [by Adani] and it is a good proposal, I must say. They will invest $500m. It will be a part of exporting energy to India. That’s good because we have so much power,” Wickremesinghe said.
#GoHomeGota
Members of civil society and organisers of the protest movement, known as #GoHomeGota, have accused Wickremesinghe of doing little to ease the fuel and food crisis nearly two months since he took over as prime minister.
They plan to organise nationwide protests on July 9 to mark three months since the beginning of the #GoHomeGota demonstrations.
Protesters say the acute shortages continue, affecting the livelihoods and nutrition of millions of people.
United Nations agencies, including the World Food Programme, say 5.7 million Sri Lankans need humanitarian assistance, with 4.9 million facing food insecurity.
The island nation of 22 million has been brought to a virtual standstill due to acute shortages of fuel and essential items such as food and medicines [Jonathan Wijayaratne/Bloomberg]
Wickremesinghe admitted there has been a drop in nutrition standards and said his government has set up a food security programme.
“We plan to allocate about rupees 200 billion [$560m] from the interim budget for welfare. We have already set aside money. I hope that will be enough with the food programme we are planning.
“I don’t want anyone to starve. People have already started some community kitchens in Colombo city, and this can spread. But we are taking steps so that no one goes hungry.”
Wickremesinghe said he planned to make Sri Lanka self-sufficient in terms of food from 2023 onward, amid fears of a global food crisis next year as the war in Ukraine grinds on.
He said the cultivation seasons from November [2021] to January-February 2022 were a failure because Sri Lanka had no fertiliser – a shortage that also marred the June-to-September season.
“We are going all out to get sufficient funds so we can start the next season that starts from October-November to about January-February 2023. We need about $500-600m. Once we get the fertiliser, seeds and other chemicals, and if there is no drought, then we will be self-sufficient in food from 2023,” he said.
Islamophobia
The prime minister also said that Islamophobia had no place in Sri Lanka. The government headed by the Rajapaksas was accused of demonising Muslims, particularly in the wake of the deadly 2019 Easter Sunday attacks and also during the coronavirus pandemic.
Wickremesinghe welcomed the removal of a ban last week on Qatar Charity, Qatar’s largest NGO, that was imposed after the April 2019 bombings that left 256 people dead.
The Sri Lankan government headed by the Rajapaksas was accused of indulging in Islamophobia in the wake of the deadly Easter Sunday attacks [File: Chamila Karunarathne/EPA]
The former interior minister had falsely claimed in parliament in July of last year that Qatar Charity – which works with multiple UN humanitarian agencies – was banned by the UN.
“I am happy it has taken place,” Wickremesinghe said, referring to the removal of the ban on Qatar Charity. “It will happen with other prohibitions also.”
He said the removal of the ban was delayed due to COVID-19 and other issues, but many experts say the U-turn by the Sri Lankan government comes as the country is desperately looking to energy-rich Gulf nations for fuel supplies.
“We are reaching out to the Middle East countries,” Wickremesinghe said, days after Sri Lanka’s energy and power minister visited Doha, the Qatari capital.
OTTAWA – Canada’s unemployment rate held steady at 6.5 per cent last month as hiring remained weak across the economy.
Statistics Canada’s labour force survey on Friday said employment rose by a modest 15,000 jobs in October.
Business, building and support services saw the largest gain in employment.
Meanwhile, finance, insurance, real estate, rental and leasing experienced the largest decline.
Many economists see weakness in the job market continuing in the short term, before the Bank of Canada’s interest rate cuts spark a rebound in economic growth next year.
Despite ongoing softness in the labour market, however, strong wage growth has raged on in Canada. Average hourly wages in October grew 4.9 per cent from a year ago, reaching $35.76.
Friday’s report also shed some light on the financial health of households.
According to the agency, 28.8 per cent of Canadians aged 15 or older were living in a household that had difficulty meeting financial needs – like food and housing – in the previous four weeks.
That was down from 33.1 per cent in October 2023 and 35.5 per cent in October 2022, but still above the 20.4 per cent figure recorded in October 2020.
People living in a rented home were more likely to report difficulty meeting financial needs, with nearly four in 10 reporting that was the case.
That compares with just under a quarter of those living in an owned home by a household member.
Immigrants were also more likely to report facing financial strain last month, with about four out of 10 immigrants who landed in the last year doing so.
That compares with about three in 10 more established immigrants and one in four of people born in Canada.
This report by The Canadian Press was first published Nov. 8, 2024.
The Canadian Institute for Health Information says health-care spending in Canada is projected to reach a new high in 2024.
The annual report released Thursday says total health spending is expected to hit $372 billion, or $9,054 per Canadian.
CIHI’s national analysis predicts expenditures will rise by 5.7 per cent in 2024, compared to 4.5 per cent in 2023 and 1.7 per cent in 2022.
This year’s health spending is estimated to represent 12.4 per cent of Canada’s gross domestic product. Excluding two years of the pandemic, it would be the highest ratio in the country’s history.
While it’s not unusual for health expenditures to outpace economic growth, the report says this could be the case for the next several years due to Canada’s growing population and its aging demographic.
Canada’s per capita spending on health care in 2022 was among the highest in the world, but still less than countries such as the United States and Sweden.
The report notes that the Canadian dental and pharmacare plans could push health-care spending even further as more people who previously couldn’t afford these services start using them.
This report by The Canadian Press was first published Nov. 7, 2024.
Canadian Press health coverage receives support through a partnership with the Canadian Medical Association. CP is solely responsible for this content.
As Canadians wake up to news that Donald Trump will return to the White House, the president-elect’s protectionist stance is casting a spotlight on what effect his second term will have on Canada-U.S. economic ties.
Some Canadian business leaders have expressed worry over Trump’s promise to introduce a universal 10 per cent tariff on all American imports.
A Canadian Chamber of Commerce report released last month suggested those tariffs would shrink the Canadian economy, resulting in around $30 billion per year in economic costs.
More than 77 per cent of Canadian exports go to the U.S.
Canada’s manufacturing sector faces the biggest risk should Trump push forward on imposing broad tariffs, said Canadian Manufacturers and Exporters president and CEO Dennis Darby. He said the sector is the “most trade-exposed” within Canada.
“It’s in the U.S.’s best interest, it’s in our best interest, but most importantly for consumers across North America, that we’re able to trade goods, materials, ingredients, as we have under the trade agreements,” Darby said in an interview.
“It’s a more complex or complicated outcome than it would have been with the Democrats, but we’ve had to deal with this before and we’re going to do our best to deal with it again.”
American economists have also warned Trump’s plan could cause inflation and possibly a recession, which could have ripple effects in Canada.
It’s consumers who will ultimately feel the burden of any inflationary effect caused by broad tariffs, said Darby.
“A tariff tends to raise costs, and it ultimately raises prices, so that’s something that we have to be prepared for,” he said.
“It could tilt production mandates. A tariff makes goods more expensive, but on the same token, it also will make inputs for the U.S. more expensive.”
A report last month by TD economist Marc Ercolao said research shows a full-scale implementation of Trump’s tariff plan could lead to a near-five per cent reduction in Canadian export volumes to the U.S. by early-2027, relative to current baseline forecasts.
Retaliation by Canada would also increase costs for domestic producers, and push import volumes lower in the process.
“Slowing import activity mitigates some of the negative net trade impact on total GDP enough to avoid a technical recession, but still produces a period of extended stagnation through 2025 and 2026,” Ercolao said.
Since the Canada-United States-Mexico Agreement came into effect in 2020, trade between Canada and the U.S. has surged by 46 per cent, according to the Toronto Region Board of Trade.
With that deal is up for review in 2026, Canadian Chamber of Commerce president and CEO Candace Laing said the Canadian government “must collaborate effectively with the Trump administration to preserve and strengthen our bilateral economic partnership.”
“With an impressive $3.6 billion in daily trade, Canada and the United States are each other’s closest international partners. The secure and efficient flow of goods and people across our border … remains essential for the economies of both countries,” she said in a statement.
“By resisting tariffs and trade barriers that will only raise prices and hurt consumers in both countries, Canada and the United States can strengthen resilient cross-border supply chains that enhance our shared economic security.”
This report by The Canadian Press was first published Nov. 6, 2024.
