Anti-incumbency wave biggest challenge
The biggest challenge before Ranil Wickremesinghe will be to stop the protests and overcome the anti-incumbency wave among the people. Ever since the movement started in Sri Lanka, the protesters have been continuously demanding his resignation. Even after becoming the Prime Minister, there were demands for Wickremesinghe’s resignation. Even when he was made the acting president, the protesters demanded his resignation. Protesters see him as close to Gotabaya Rajapaksa and Mahinda Rajapaksa. Not only this, they also consider him responsible for the current economic crisis. In such a situation, his victory in the presidency could inspire the protesters to intensify the protest.
bailout package
Sri Lanka’s foreign debt has reached about $ 51 billion. In such a situation, after assuming the presidency, Wickremesinghe’s first task will be to persuade the International Monetary Fund to give a bailout package. But the task will not be easy as the IMF has said that before finalizing such a package, Sri Lanka will have to do a lot of work on restructuring its debt again and strictly implementing anti-corruption measures. Many experts believe that corruption is responsible for this situation in Sri Lanka.
lack of fuel
Sri Lanka is facing fuel shortage since last 5 months. Long queues are being seen outside petrol pumps, yet people are not getting fuel. At the end of June, the situation became so critical that the Sri Lankan government banned the sale of petrol and diesel to vehicles engaged in non-essential services for two weeks. Fuel prices in Sri Lanka are skyrocketing due to shortages. However, the prices were revised on July 17. After which the state-run Ceylon Petroleum Corporation (CPC) reduced the price of petrol octane 92 to Rs 450 per liter, petrol octane 95 to Rs 540 per litre, super diesel to Rs 520 per liter and auto diesel to Rs 440.
foreign exchange reserves
According to government estimates, Sri Lanka’s foreign exchange reserves can barely cover imports for three months. In such a situation, the government, which is facing a shortage of foreign exchange reserves, has taken some steps like limiting the transaction of US dollars and reducing the import of agrochemicals, vehicles and spices. Despite this, Sri Lanka’s imports exceed the value of exports of tea, rubber, etc. Now Wickremesinghe will have to restructure the country’s debt, balance it with repayment and replenish Sri Lanka’s foreign exchange reserves.
tourism improvement
Sri Lanka is the biggest earner of foreign exchange from the tourism industry. Three million people of Sri Lanka are directly and indirectly connected with the tourism industry. Tourism contributes up to 5 percent of Sri Lanka’s GDP. But, the political instability following the coronavirus pandemic has broken the back of the Sri Lankan tourism industry. The government has blamed Covid and a series of bomb attacks in 2019 for the declining tourist numbers, while people say political instability is the biggest reason. In such a situation, Ranil Wickremesinghe will have to create such a situation, which will increase the confidence of foreign tourists to visit Sri Lanka.
China’s debt trap
It will be a difficult task for Wickremesinghe to get out of China’s debt trap. Sri Lanka owes more than $7 billion to Chinese banks and other entities. Sri Lanka also owes around $25 billion to private sector bond investors. On top of this, China has refused to waive loans to Sri Lanka. In such a situation, Sri Lanka faces a serious challenge of getting out of the Chinese debt trap and repaying its debt.