Hillary and Cameron hold key to Sri Lanka recovery

ECONOMYNEXT – The acrimonious US presidential race and Britain’s referendum on Europe may appear far removed from Sri Lanka, but both events could hold the key to the island’s recovery from a right royal economic mess.

Prime Minister Ranil Wickremesinghe’s government decided to bite the bullet and raise taxes from next month in a bid to boost state revenue, but the external factors could have a make-or-break impact on Sri Lanka.

Sources close to the government said the Premier was closely following the US elections as well as the “brexit” debate where Britain will decide at a referendum in June whether to stay in the European Union or exit.

“These two events along with the oil price will have a very direct bearing on us,” the source said adding that Colombo would be happy to see a Clinton presidency and Britain remain in the EU.

British Prime Minister David Cameron is pushing to remain in the EU, but is challenged by popular London Mayor Boris Johnson who wants an exit from the European Union.

Sri Lanka’s current economic recovery measures ahead of an IMF bailout that could be finalised within weeks take into account that Clinton will secure the democratic party nomination and go onto win the November election.

Clinton as Secretary of State in 2009 had spoken against an IMF bailout during the height of the war against Tamil Tiger rebels. The then Colombo government had been highly critical of Clinton who led international condemnation of the Rajapaksa administration’s human rights record.