Efforts on to form government in Sri Lanka to avail of IMF bailout

ET has learnt that hectic parleys are going on to form the next government that would negotiate with the IMF. Colombo-based sources told ET that further delay in government formation would delay IMF bailout that could plunge the country into a mega crisis.

Currently, the President’s attempts to rule with his advisers are not yielding results, sources said. President Gotabaya Rajapaska has stated that he is holding talks with other political parties aimed at forming a unity government. But the main opposition has asserted that it will not be part of the interim administration unless the President steps down, which Gotabaya Rajapaksa is not willing to do.

At present, there is no clarity on which political parties might come together to form a national unity government. The emergency powers need Parliament approval to extend beyond a fortnight but the government may not have majority on the floor of the House.

Amid this, key Opposition leader Sajith Premadasa has held a meeting with the Lankan Central Bank governor on the crisis. India is apprehensive that any delay in the IMF bailout will push Lanka towards an unprecedented crisis.

Lanka is staring at bankruptcy. However, an early election is not feasible as the exchequer cannot afford to sponsor polls at this stage, ET has learnt.

Meanwhile, Lankan security forces are out in force across the island nation with orders to shoot looters on sight amid continuing protests at the government’s handling of a devastating economic crisis. Despite a nationwide curfew, there was a second night of arson attacks on Tuesday.

Shops near Colombo were torched, as well as a resort owned by former Prime Minister Mahinda Rajapaksa’s son. There are reports that Mahinda Rajapaksa has taken shelter in a naval base. At least nine people have been killed and 200 injured in the unrest since Monday.

Opposition politicians have alleged that the violence could have been staged to give the army a pretext to take power. But the military has denied that any such move has been planned.

“When there is a dangerous situation in the country, powers are given to the military to deal with it,” defence secretary Kamal Gunaratne told a news conference. “Don’t ever think that we are trying to capture power. The military has no such intentions.”