African Reserves Loans

Sri Lanka closes three foreign missions as economic crisis deepens

Sri Lanka has temporarily closed three diplomatic missions abroad from December 31 in an attempt to save foreign exchange reserves and cut spending, as the country faces crippling debt.

The Sri Lankan High Commission in Abuja, Nigeria, the Sri Lankan Consulate General in Frankfurt, Germany, and the Sri Lankan Consulate General in Nicosia, Cyprus, will be closed from January.

Commenting on the closures, the Foreign Ministry said:

“The restructuring is being undertaken with the aim of retaining the country’s much-needed foreign exchange reserves and minimizing the expense of maintaining Sri Lanka’s missions abroad.”

Sri Lanka plans to process requests from the High Commission in Nigeria, through its High Commission in Nairobi, Kenya and other African countries that have been accredited through the Sri Lankan Mission to Abuja, will be redirected via the Sri Lankan Embassy in Cairo, Egypt, approximately 2,133 miles one way. Functions of the Sri Lankan Consulate in Frankfurt, including the promotion of trade, investment and tourism, will fall under the purview of the Sri Lankan Embassy in Berlin, Germany. Sri Lanka will transfer the responsibilities of the general office of the consulate in Cyprus to the embassy of Sri Lanka in Rome, Italy.

The restructuring comes as Sri Lanka faces a deepening financial crisis led by President Gotabaya Rajapaksa. In the Next 12 months, in the public and private sector, Sri Lanka will have to repay about US $ 7.3 billion in domestic and foreign loans, including a repayment of international sovereign bonds of US $ 500 million in January. However, the foreign exchange reserves were only $ 1.6 billion. The World Bank estimates that 500,000 people have fallen below the poverty line since the start of the pandemic, equivalent to five years of progress in the fight against poverty. Rajapaksa said Sri Lanka was in an economic emergency, the military was given supreme power to ensure that essential items, including rice and sugar, were sold at prices set by the government, although the prices continue to skyrocket as inflation rises.

The strong militarization of the North East has led to an intrusion into civilian life, affecting the livelihoods of Tamils. Since the end of the armed conflict, investments have been stifled in the Tamil homeland due to rampant militarization.

Last year, TNPF MP Gajendrakumar Ponnambalam stressed that the Rajpakasa government’s development promise to “solve all problems” had failed. Gajendrakumar highlighted the government’s inaction to protect “vulnerable people who have been facing a war situation for 32 years”. This has led to high levels of poverty throughout the region.

Ponnambalam pointed to the height of the livelihood restrictions observed in the Tamil homeland preventing activities such as fishing and agriculture, “about 30 percent of Jaffna district was under military control under the name of high security zone” . “Large areas of land were not -go zones,” he added. “Most of the farmland in the northeast was occupied as unauthorized areas for the population. This is the condition the Tamil people have had to face for over 32 years. ”

Read more on Al jazeera and the Colombo Diary