Sri Lanka’s Rajapaksa Axes Ministers Critical of Economic Plans

(Bloomberg) -- Sri Lankan President Gotabaya Rajapaksa shuffled his cabinet and removed two ministers as the government faces rising discontent over the handling of the island's economic crisis.

Rajapaksa replaced Energy Minister Udaya Gammanpila and Industries Minister Wimal Weerawansa, who have recently been critical of the policies of the president and his brother, finance minister Basil Rajapaksa. An unspecified number of ministers had their portfolios changed.

“You cannot be in the government and be critical of it,” Gamini Lokuge told the local Derana News channel after being named as the new energy minister. He was previously the power minister and has been replaced by Pavithradevi Wanniarachchi. S.B. Dissanayake took Weerawansa's position as industries minister.

In the midst of the ministerial changes, the Central Bank of Sri Lanka is scheduled to announce its rate decision on Friday at 7:30 a.m. in Colombo. Authorities on Wednesday sold short-term debt at the highest rates in about three years, a move traders interpreted as a signal that the monetary authority will raise borrowing costs.

Weerawansa, who heads the National Freedom Front, a government ally, said Wednesday that finance minister Rajapaksa was too proud to receive sound economic advice.

“If people are kept in the dark, it will come to a point where people will revolt,” said Gammanpila of the Pivithuru Hela Urumaya party, another ally.

Gammanpila had called for higher fuel prices to cover losses at the state-run Ceylon Petroleum Corp. and for prioritizing dollars for oil imports.

It wasn't immediately known if Gammanpila and Weerawansa's parties would quit the government. Their members account for only about four seats in Rajapaksa's coalition, which has 145 seats in the 225-seat chamber.

Rajapaksa has been spending and seeking to restore confidence even as he faces debt payments with a dwindling cash pile and amid Asia's fastest inflation. The nation, which is facing fuel shortages and power cuts amid a shortage of dollars for electricity generation, has so far relied on bilateral loans, including from China and India, to fend off a default.

While it has shunned the prospect of an IMF bailout, because of its strict conditions, the finance minister said last month that it's seeking technical advice from the lender.