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Opinion
Ruth Pollard

Is the Great Sri Lanka Fire Sale About to Begin?

Getting a bailout won’t be easy for the financially embattled government, while privatizing key state assets risks more turmoil. 

Now for the financial reckoning.

Now for the financial reckoning.

Photographer: Ishara S. Kodikara/AFP/Getty

Sri Lanka has a habit of selling off its assets when times are tough. And it doesn’t get much tougher than this. The tiny island nation is in default and in desperate need of $4 billion to pay for food, fuel and fertilizer to stave off a deeper crisis. 

The newly appointed prime minister, Ranil Wickremesinghe — his sixth time in the job — wasted no time in announcing the government would privatize Sri Lankan Airlines, which prior to the pandemic had flown to 126 destinations in more than 60 countries. The carrier struggled with a stretched balance sheet even before Covid-19 and may fail to make payments to aircraft lessors, Bloomberg Intelligence analysts wrote last month. It had lost $125 million in the year through March 2021 and will likely struggle to find a buyer willing to take it on.