Tag: Economic Crisis

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Economic Crisis and Security Threats Loom Over Pakistan

Some political parties also have highlighted the security challenge as the basis on why polls should not be held on 8th February 2024…reports Asian Lite News

Pakistan is heading into a delayed election day at a time when the country is faced with major challenges in terms of security, terrorism, economy and political transition process.

With Imran Khan and his party out of contention, it is Bilawal Bhutto’s PPP (Pakistan People’s Party) and Nawaz Sharif’s PML-N (Pakistan Muslim League – Nawaz) fighting it out to claim victory. But the big question is… are they ready to address the dominating issues with responsibility?

The situation in Pakistan poses a serious challenge and a daunting task ahead for any party, which takes control after the polls. One of the most challenging issues that dominate the crisis is the persistent economic and financial meltdown the country has been struggling to manage.

“Pakistan has severe and serious issues in terms of its economic stability and financial roadmap. The country is under the strict control of the International Monetary Fund (IMF) that dictates every step and decision of the policy. The towering rise in inflation has damaged the lives of the people in unimaginable ways. And despite the fact that election day is round the corner, rise in fuel prices, energy tariffs and other things continue to rise. This is because the government has zero control over the IMF terms,” said Javed Hasan, an economist.

Talking about concerns over the elections being flawed and questions being raised over the transparency of the polls, Javed said that free and fair elections should serve as beacons of hope for political stability, paving the way for improving the investment climate and sparking economic revival.

He said that the transformational potential of democratic governance is immense.

“Conversely, flawed elections fundamentally undermine democratic governance and prospects of economic prosperity. The repercussions of electoral malpractice reverberate across society, weakening electoral institutions and impeding public participation, bringing the nation close to a precipice with limited prospects of an economic turnaround,” Javed said.

The other major challenge glaring for the next government is the surge in terrorism related incidents, posing a serious threat to the security and even elections. Pakistan has seen a major increase in terror attacks in the past, which seem to have now been extended to targeting of the election process, political parties and even the candidates.

Some political parties also have highlighted the security challenge as the basis on why polls should not be held on 8th February 2024. However, the military establishment and the judiciary has made it clear that polls would be held, raising the stakes of pre-poll, poll day and post-poll days as extremely vulnerable to terror attacks and bloodshed.

The third most important issue that dominates the political discourse is the uncertainty among the masses, who fail to see any new dimension or positive outcome of the polls as they see the process as selection and not election.

The ouster of Imran Khan from the election race, taking away the election symbol of his political party, the ongoing virtual ban on PTI public gatherings and corner meetings and arrests of PTI workers and candidates is one of the prime reasons for the prevailing uncertainty.

Most of the PTI supporters believe that fear is being spread by the military establishment to ensure they get their selection process for the next government completed.

The prevailing notion that the upcoming elections would be flawed and would not necessarily reflect the peoples’ choice through votes, is expected to have a direct impact on the overall handling and overview of the bigger and more challenging issues of economy and security for the government moving forward.

ALSO READ-Imran Khan, wife get 7-year jail for unlawful marriage

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Economic crisis reveals true friends: Lankan Minister

The Sri Lankan minister said that some issues related to Tamilians, especially fishermen issues were also discussed during the meeting with PM Modi..reports Asian Lite News

The India-Sri Lanka relationship is strong and close, and it was revealed during the economic crisis who is a real friend of Sri Lanka, Sri Lankan Minister Jeevan Thondaman said on Monday.

He stressed that a “permanent solution” to the fishermen issue is important for India-Sri Lanka cultural and economic ties. The Sri Lanka Minister for Water Resources and Estate Infrastructure was giving a press briefing at the Chennai Airport after his one-week trip to India.

While speaking with the media, Thondaman said, “I completed my one week India trip. Last week along with Sri Lanka President Ranil Wickremesinghe, we met Prime Minister Narendra Modi in Delhi. In the meeting with PM Modi, we discussed many things and MOS were signed in the renewable sector”.

He said that the whole world got to know who is a real friend of Sri Lanka during the economic crisis.

“India-Sri Lanka relationship is so strong and close. A few could be there mixing politics, and showing India in a bad picture among Sri Lankan people. But, during this economic crisis, it has been revealed and everyone got aware who is a real friend of Sri Lanka,” he said.

The Sri Lankan minister further said that some issues related to Tamilians, especially fishermen issues were also discussed during the meeting with PM Modi.

“We even submitted the 13th Amendment to the Sri Lanka constitution to Prime Minister Modi. Some discussions related to refugees in refugee camps were also part of the meeting,” he added.

Thondaman also met Tamil Nadu Chief Minister MK Stalin on Sunday, and discussed issues regarding a permanent solution to fishermen issues.

“Both sides are Tamilians only and both sides are fighting for their living. First, according to the Maritime Prevention Act, the bottom line trawlers are illegal and we can’t accept them. And similarly, a few boats crossed the Sri Lanka border and at that time we seized them. Regarding this, today there is a cabinet meeting in Sri Lanka. We need a permanent solution to this as India-Sri Lanka cultural and economic connect is very important,”

He added that the refugees are coming to Tamil Nadu due to economic crisis, and for solving the issue, Sri Lanka is working on developing its economy. (ANI)

ALSO READ: Sri Lanka’s inflation rate eases sharply

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Pak economy in tailspin as Saudi cold, IMF paused

Shehbaz Sharif

There is a very slim chance that Pakistan may be able to win Saudi Arabian support for the resumption of its IMF programme, but if it does, this will be a temporary respite …. A special report on the economic affairs of Pakistan by Dr Sakariya Kareem

Pakistan’s economy is “in a tailspin, moving from crisis to catastrophe”, its renowned US-based economist Atif Miah has warned as the International Monetary Fund’s sorely-awaited bailout is nowhere near sight and Saudi Arabia shows a cold shoulder.

Saudi Arabia, Pakistan’s biggest benefactor, has reportedly invited the Sharif family, including Prime Minister Shehbaz and his self-exiled elder brother Nawaz, to end Ramadan and celebrate Eid. This may indicate the reinforcement of close political ties. But economists caution against the repeat of past Saudi bailouts.

They say Saudi under Crown Prince, Prince Mohammed bin Salman, insists that its surplus funds, earned from the recent oil money boom in the last year, are not for “free lunch.”

“There is a very slim chance that Pakistan may be able to win Saudi Arabian support for the resumption of its IMF programme, but if it does, this will be a temporary respite,” analyst  Mosharraf Zaidi wrote in The News International (April 04, 2023).

“Pakistan will not be able to secure any major package of economic support from Saudi Arabia today or in the foreseeable future because the model for such blanket support simply does not exist anymore. Saudi Arabia has changed rapidly (and for the better) – and its rulers, whilst maintaining very strong feelings for Pakistan, simply do not have the capacity to continue to allow Pakistani elites (military and civilian) to convert those fraternal bonds into unconditional bailouts,” Zaidi said.

Motorcyclists wait at a gas station in east Pakistan’s Lahore.(Photo by Sajjad/Xinhua/IANS)

Atif Miah’s warnings have gone unheeded in Islamabad. He was invited by former Prime Minister Imran Khan to join his government, but he reneged under pressure as Miah is an Ahmedia, an Islamic minority declared non-Muslim in Pakistan.

The latest putdown has come from the New York Times (April 3. 2023). Writers Vivian Nereim and Vivian Yee echo Zaidi’s warnings that Riyadh will no longer offer funds to Pakistan and others who refuse to reform their economic infrastructures.

“The kingdom is still sending money abroad. But much of it is now geared towards international investments for profit and influence and kick-starting new industries at home. The Saudi government has also taken on a role similar to the IMF, which gives it even greater sway over regional politics,” the NYT said.

The changes in Saudi Arabia over the last decade, and especially since the middle of 2017, it said, have rendered traditional ways of working in Riyadh obsolete.

According to Zaidi, “Pakistani military and civilian rulers can continue visiting Riyadh and asking for the same thing over and over and over again. The absence of the traditional blank cheque from Saudi Arabia should have indicated to Pakistani authorities the drastically different scenario for how this new Saudi Arabia makes decisions.

“No bilateral relationship captures the incredible incompetence of the Pakistani elite better than the Pakistan-Saudi Arabia relationship,” Zaidi said.

His comments come amidst unprecedented economic chaos, not just of foreign exchange reserves that have depleted to pay for only a fortnight, but amidst industrial slowdown, falling exports and shortages of essential commodities. The holy month has seen food riots and even deaths of poor people standing in long queues awaiting relief at government shops.  

Zaidi says: “Saudi investment in Pakistani assets requires basic paperwork and due diligence. Understand also that Saudi officials have every reason to treat Pakistan as a priority investment destination. Yet, despite all the incentives for Saudi investments to be formalized and closed, four years after the MBS visit, none have materialized. The reason is simple: Pakistan has repeatedly failed to provide even the very basic paperwork and due diligence required to close divestments of some of the publicly owned assets under discussion.

Shehbaz Sharif
Pakistan Prime Minister Shehbaz Sharif meets UAE Vice President and Prime Minister Sheikh Mohammed bin Rashid Al Maktoum.

The “harsh truth is”, Zaidi writes: “Pakistan has neither the bureaucratic capability nor the decisive national leadership to allow for investments from Saudi Arabia (or the UAE or Qatar for that matter) to materialize.”

“Old Pakistanis trying to scrape the bottom of the barrel have already been relegated to embarrassing caricatures as they continue to Jurassic Park their way around the region and the world. There are lessons from Saudi Arabia that need to be learnt and applied in Pakistan. But an elite that never learns from what is right under its nose is unlikely to benefit from the experience of a true friend, ally and now archetype – beyond its borders,” says Zaidi.

ALSO READ: Asim Munir’s task is to take Imran out of polls

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Delay in Reforms Push Islamabad into Default

Pak economy has little chance to improve without addressing structural distortions. The World Bank, identifying the main reasons for structural imbalances, observed that distortions either introduced by policy decisions or other impediments remain unaddressed while reforms remain eluding impeding increase in productivity. These distortions are present across all the aspects of economic policies including taxes, subsidies, trade restrictions and gender norms … writes Dr Sakariya Kareem

Recently Pakistan Finance Minister Ishaq Dar dismissed any threat of default or oil shortage. Surprisingly the finance minister went on to promise that the due payment on the Sukuk bond would be done as per schedule.  Notwithstanding his assurances and Minister of State Dr Aisha Ghaus Pasha’s statement on the floor of the National Assembly that there is nothing to worry about, the economic situation of Pakistan is very fragile.

Pak economy has little chance to improve without addressing structural distortions. The World Bank, identifying the main reasons for structural imbalances, observed that distortions either introduced by policy decisions or other impediments remain unaddressed while reforms remain eluding impending increases in productivity. These distortions are present across all aspects of economic policies including taxes, subsidies, trade restrictions and gender norms.  

Pakistan Prime Minister Shehbaz Sharif Pic credits Instagram

Islamabad is facing an unprecedented foreign exchange crisis.  The perception of Pakistan’s risk of default has worsened with the 5-year Credit Default Swap (CDS) surging by 30 percentage points in a week to 93% ahead of the repayment of the USD 1 billion Sukuk international bond, maturing in early December. The CDS was just 4.2% in January 2021. The developments came amid a delay in the 9th review of Pakistan’s economy by the International Monetary Fund (IMF), which partly blocked the foreign currency inflows.

The foreign exchange reserves depleted to a critically low level of USD 8 billion against over USD 20 billion in August 2021, weakening the country’s capacity to make international payments.  Foreign Direct Investment (FDI) nosedived by 52% during the first four months of the current fiscal year FY23, reflecting poor economic health. Pakistan could manage to receive only USD 4.2 billion in new loans in the first four months of the current fiscal year compared to estimates of around USD 7 billion.

Adding to the forex crisis of Pakistan is a continued fall in remittances.  In July-October 2022 remittances fell to USD 9.9 billion, down 8.6% from USD 10.827 billion in July-October last year.  It is estimated that if the declining trend continues, total remittances in FY23, ending in June would remain close to USD 30 billion, lower than the USD 31 billion that flowed in FY 2022.

That may make it difficult for Islamabad to contain its current account deficit to around USD 10 billion.  This is viewed in the light of sluggish merchandise exports which recorded a meagre growth of 1% in the July-October 2022 period to USD 9.549 billion and declining remittances from Saudi Arabia, UAE and the UK, constituting about 57% of the total receipt with no signs of an uptick due to economic and expatriate labour market conditions indicate. There is no sign of improvement in the forex situation. Expatriate Pakistanis in Saudi Arabia are falling because expatriate workers from other countries, including India are outnumbering expatriate Pakistanis in professional/managerial jobs.

Meanwhile, Pakistan’s textiles exports have dropped to their 17-month low since May 2021 due to a global economic slowdown in the textile and clothing demand in Europe, the UK and the US amid elevated price inflation, growing energy expenditure and surging credit costs in the West.  Last year, Pak export earnings were at USD 19.35 billion, a historic high.  But this year the export scenario is disappointing.  Textile exports in Pakistan may decline by USD 3 billion.

Although the overall trade deficit of Pakistan shrank to USD 10.8 billion in the first four months of FY 2023 as compared to the deficit of USD 13.75 billion in the same period of the previous fiscal year, there is no reason for complacency as it is primarily due to decline in imports.  This could be a sign of economic slowdown. It is also due to a slight dip in international commodity prices.

Thus, Pakistan’s economy continues to be in shambles and strangulated in a deep mess, owing to the depletion of foreign currency reserves, a rising import bill and a depreciating rupee. It is widely feared that Pakistan is on the verge of imminent default.

Taken together, these impediments create powerful incentives for firms and households to allocate resources in ways that are socially suboptimal and discourage innovation in the country. Direct tax rates tend to make it more profitable to invest in real estate rather than investing in manufacturing or tradable services without the production of forex generating exportable employment.

Gender norms in Pakistan often mean that this accumulated human capital is underused because females do not participate to their potential in the labour force. World Bank states that the aggregate productivity gains of eliminating distortions stand at 30%, with about 18% due to the improved allocation of resources and 12% due to the entry of more firms into productive activities.

The decline in productivity is associated with low investment rates, particularly in tradable and productive sectors.  Further, government support to SOE, which is unviable, uses borrowings as it faces a scarcity of funds. Many of them operate in upstream sectors such as transport, finance or energy, spreading their inefficiencies to the rest of the economy due to their linkages.

Pakistan is a poor learner.  Islamabad relied on large remittance inflows from its large diaspora, particularly in the Middle East countries. Pakistan also has witnessed periods of abundant foreign exchange inflows in the past in the form of external loans, grants and remittances. But the global economy is facing severe inflation and recessionary fears. The past streams of investment flows cannot be expected and remittances and exports would not see any spurt, at least in the medium term. Islamabad’s policy responses to these changes have been inadequate. In the past even when it received external inflows, its external sector, for most of the period was facing a deficit.  Pakistan has faced current account deficits in 18 out of 22 years and availed 22 stabilization & budget support programs from the IMF which so far is indicative of economic uncertainty. 

Since the beginning of 2022, Pakistan faced a series of balance of payments crises. This crisis heightened risks to debt sustainability and increased vulnerability for implementing long-term structural reforms. With structurally low exports and limited FDI inflows, financing this imbalance has become a challenge which is now grown to gigantic proportions.  Devastating floods had taken up whatever was left of the poor population. Islamabad is facing imminent default in meeting foreign debt obligations.  The signs are not good.

It is now being curiously watched whether Pakistan policymakers halt politicking and solve the protracted economic problems, especially along the clues provided by the multilateral agencies. 

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Desperate Pakistan plans selling assets to prevent default

Prime Minister Shehbaz Sharif

Pakistan President Arif Alvi has not signed the ordinance yet, reports Asian Lite News

In a desperate attempt to save the country from default through emergency sale of state’s assets to foreign countries, the Pakistan federal cabinet has approved an ordinance to bypass all the procedures for the process and also abolished regulatory checks including the applicability of six relevant laws, media reports said.

Through the Inter-Governmental Commercial Transactions Ordinance 2022, the Centre has also empowered itself to issue binding instructions to the provincial governments for land acquisition, according to a copy of the ordinance, Express Tribune reported.

Pakistan President Arif Alvi has not signed the ordinance yet.

The Pakistan government has also barred the courts of the country from entertaining any petition against the sale of assets and shares of the government companies to foreign countries, as per the ordinance, Express Tribune reported.

The federal cabinet had approved the ordinance on Thursday to sell stakes of oil and gas companies and government-owned power plants to the UAE to raise $2 billion to $2.5 billion to avoid the looming default.

The UAE had in May refused to give cash deposits due to Islamabad’s inability to return previous loans and instead asked to open its companies for investment.

Miftah Ismail

Finance Minister Miftah Ismail had said this week that it usually took 471 days to complete one privatisation transaction. He had added that the government had to conclude deals with foreign countries in days to urgently raise funds.

The International Monetary Fund (IMF) has placed a condition that Pakistan’s case could not be taken to the board until it arranged $4 billion from friendly countries to bridge the financing gap.

The federal Law Minister had not provided the reason for the purpose of this article.

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World should worry about Pakistan’s looming collapse

Sri Lanka’s collapse worries the region, but Pakistan’s collapse should worry the world

With a shrinking economy and rising inflation in Pakistan, experts worry that Pakistan’s future is bleak saying that while Sri Lanka’s collapse worries the region, Pakistan’s collapse should also be a cause for concern.

Pakistani elites live in a state of denial believing that the status quo in which they live an affluent life insulated from broader society is permanent. It is not. The bubble is collapsing, and the result will not be pretty, noted the National Interest Magazine.

The Ukraine-Russia conflict impacted the economy of the entire world. Already suffering an economic crisis, decades of corruption, mismanagement, and unstable governance, the situation of Pakistan has been particularly vulnerable. While many countries are dependent upon Ukrainian or Russian wheat or foreign energy imports, Pakistan requires both.

Between July 2020 and January 2021, Pakistan was the third-largest consumer of Ukrainian wheat exports after Indonesia and Egypt. The price spike in oil prices has hit Pakistan hard, driving up the cost of its imports by more than 85 per cent, to almost USD 5 billion, just between 2020 and 2021, the National Interest Magazine reported.

At the end of Pakistan’s fiscal year on June 30, 2022, its trade deficit neared USD 50 billion, a 57 per cent increase over the previous year.

In June, inflation soared to over 20 per cent, the highest in the recent past. In May, Pakistan’s Bureau of Statistics (PBS) stated that the inflation rate as measured by the Consumer Price Index (CPI) was 13.76 per cent. The inflation increased by 6.34 per cent month-on-month (MoM) and reached 21.32 per cent year-on-year (YoY) in June.

According to the State Bank of Pakistan (SBP), inflation in the country will remain in the range of 18-20 per cent this fiscal year.

Pakistan Prime Minister Shehbaz Sharif

“Reliance on imports for edible oil and oilseed meals to meet domestic demand consumption has been increasing over the past two decades: 86 per cent of domestic edible oil consumption in 2020 came from imports up from 77 per cent in 2000,” SBP stated.

Meanwhile, the education sector reported single-digit inflation of 9.46 per cent, and the communication sector reported inflation of 1.96 per cent, Dawn reported citing PBS.

Motor fuel, liquefied hydrocarbons and electricity charges recorded a 95 per cent increase in year-on-year inflation, as per the data.

Amid this, the soaring prices of food products, oil and fuel deteriorated the condition of the country.

Business experts have expressed concerns over the increasing value of the Dollar saying that the country is heading toward social unrest and fear and that it is becoming unsafe for foreign investment due to back-to-back government policies that seek to discourage investors.

Yusuf Nazar, a former chief strategist at Citigroup’s emerging markets division, estimates that Pakistan’s foreign exchange reserves have dropped by half since February to just USD 6.3 billion, akin to what Iran suffered under the so-called “maximum pressure” campaign, the National Interest Magazine reported.

A man carries a sack of vegetable at a fruit and vegetable market ahead of the Ramadan in Islamabad. (Xinhua/Ahmad Kamal/IANS)

He said that Pakistan has received more International Monetary Fund (IMF) bailouts than any other country. This shows the unwillingness or inability of the Sharifs, Bhuttos, and Khans to implement serious reform.

“International patience has worn out. The IMF no longer trusts Pakistani promises to reform and is unwilling to throw good money after bad. Islamabad’s unwillingness to conduct reforms demanded by the Financial Action Task Force (FATF) underlines how intertwined the Inter-Services Intelligence agency is with the murkier aspects of Pakistani finance,” Nazar noted.

Meanwhile, it was reported that the International Monetary Fund (IMF) intends to ban Pakistan from borrowing more from China. Islamabad’s plan to seek PKR 7.9 billion from China for China-Pakistan Economic Corridor (CPEC) projects is now likely to hinge upon the IMF recommendations.

Driving Pakistan’s economy with the help of external doles is unsustainable and Pakistan desperately needs structural reforms. The IMF has raised objections to Pakistan’s loans from China and arbitrarily high payments made to Chinese independent power producers (IPP), suggesting Islamabad renegotiate its energy agreements with Beijing.

With this, the China-Pakistan Economic Corridor (CPEC) projects, instead of promoting growth in Pakistan, have become a liability for Islamabad.

Sovereign counter guarantees to Chinese independent power producers eat up the Pakistani government’s revenue, even as Pakistan continues to face lengthy power outages. CPEC project implementation is sporadic even though, for the last four years, Pakistan is the world’s largest recipient of Chinese grants and assistance.

The anti-China sentiment in Pakistan is also quite high. The Chinese strategy of land grabbing and providing employment to its own people at the cost of the local population has created a new set of challenges.

On his way to National Assembly, Prime Minister Shehbaz Sharif stops by D-Chowk to appreciate the efforts of Police, Rangers, Administration and other law enforcing agencies. (Photo: Twitter@PakPMO)

The World Bank has warned that Pakistan could soon face “macroeconomic instability.” Societal instability would soon follow. Pakistan’s private sector has not created enough jobs to absorb the labour pool. Anger is reaching the boiling point, and growing criminality hints at a societal breakdown.

Given that, Sri Lanka’s collapse worries the region, but Pakistan’s collapse should worry the world, the magazine noted.

For decades, state failure in Pakistan has been a nightmare scenario. Both Pakistan and the broader world have had a taste of that scenario as violence, extremism, and poverty engulf the former capital and commercial hub of Karachi and as Pakistani authorities lose control over many regions alongside the Afghanistan border. (ANI)

ALSO READ: Ethnic tensions rise in Pakistan after Sindhi youth murder

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IMF to start next round of technical discussions with Lanka

IMF urges Lebanon to implement 'agreed-upon' reforms

The two sides held the first round of discussions at the IMF headquarters last month…reports Asian Lite News

The International Monetary Fund (IMF) announced it will begin the next round of technical discussions with Sri Lanka from May 9-23

IMF’s mission chief for Sri Lanka, Masahiro Nozaki said that the Fund is committed to assisting Sri Lanka, in line with its policies, reports Xinhua news agency.

“Because Sri Lanka’s debt is assessed as unsustainable, approval of IMF financing, including through a Rapid Financing Instrument, would require adequate assurances that debt sustainability will be restored,” he said.

The two sides held the first round of discussions at the IMF headquarters last month.

Sri Lanka hopes for a Rapid Finance Instrument (RFI) facility as well as a larger Extended Fund Facility (EFF) from the IMF to overcome its foreign currency shortage issues that had led to an economic crisis.

ALSO READ-State of emergency in Lanka

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‘Tyranny, nepotism’: Galle Face protesters slam Rajapaksa rule

(ANI)

Furious protesters have been demanding change in the political system and held Rajapaksas responsible for the present state of the economy as well as demanding that “the president and Prime Minister should be imprisoned and their assets should be frozen”, reports Asian Lite News

A massive crowd continues to remain gathered at Galle Face, the main beachfront in the capital Colombo, outside Sri Lankan President’s secretariat to protest against Prime Minister Mahinda Rajapaksa and President Gotabaya Rajapaksa amid the economic crisis in the country with agitators at the protest site terming the government tyrant and full of nepotism.

One of the protestors at the site said, “For years and years the Rajapaksa government took money from us. They stole from us. We are sick and tired of this tyranny because there is so much nepotism here. Prime Minister Mahinda Rajapaksa and President Gotabaya Rajapaksa are brothers and we want them to go from here because we do not see any prosperity for our nation. As long as they are here they will not be able to fix the economy.”

“People of many ethnicities and races have come here to protest against tyrant Gotabaya Rajapaksa. These people do not know how to run a country as they do not have any plans. All they want is to steal. There are so many who are campaigning for Rajapaksa to go to jail and we want him to go to jail. All the civil unrest is his fault. We want to oust him and hopefully change our political system,” he added.

One 14-year-old child at the protest site criticised the current government for ruining the nation. “There are a lot of children here who go to school. We have a lot of fantasies and dreams to accomplish when we grow up and we cannot achieve anything in our country.. on our motherland due to Rajapaksa because he has ruined our country and we want to speak up for that. We want a future in our country,” he hoped.

Furious protesters have been demanding change in the political system and held Rajapaksas responsible for the present state of the economy as well as demanding that “the president and Prime Minister should be imprisoned and their assets should be frozen.”

People at the site of the protest were carrying placards with anti-government slogans written on them. Children were carrying placards with the slogans ‘we need a good future’. Others displayed ‘Freeze all Rajapaksa money’ banners to show their anger.

Sri Lankan Prime Minister Mahinda Rajapaksa and President Gotabaya Rajapaksa

A massive protest has been continuing in the Galle Face Green area in the capital city of Colombo as the Island nation is facing its worst economic crisis since independence with food and fuel shortages, soaring prices, and power cuts.

This comes at a time when Sri Lanka is celebrating its New Year. The Sri Lankans are protesting against the government’s handling of the economic situation and demanded the resignation of President Gotabaya Rajapaksa and Prime Minister Mahinda Rajapaksa.

Protesters have been accusing Rajapaksa’s government of corruption and misrule. (ANI)

ALSO READ: World Bank dubious about Lankan economic outlook

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Sri Lanka declares emergency amid unrest over economic crisis

President Gotabaya Rajapaksa said he believed there was a “public emergency in Sri Lanka” that necessitated invoking the tough laws, reports Asian Lite News

Sri Lanka’s President Gotabaya Rajapaksa on Friday declared a state of emergency in the country giving the security forces wide authority to arrest and detain suspects with immediate effect.

Rajapaksa has issued the “Extraordinary Gazette” declaring a public emergency after hundreds of protesters gathered in the capital and many of them tried to storm the President’s residence to protest against the government for “poor management of economic policies, which has created mess in the country”.

The President said he believed there was a “public emergency in Sri Lanka” that necessitated invoking the tough laws.

“The Gazette has been issued considering the prevailing situation in the country and in the interests of public security, the protection of public order and the maintenance of supplies and services essential to the life of the community,” said a statement.

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