purple and carrying crosses during their pilgrimage. ♪ anchor: these are the headlines at "al jazeera." three palestinians killed by israeli forces in the west bank, a 14-year-old boy included. forces have been conducting raids for five raids after palestinian gunmen killed multiple people. these pictures are outside ramada, where vehicles are pelted with stones. earlier, an appeal can be heard about a sentence for a palestinian held in an israeli

prison. he was 13 years old when he was arrested in 2015 in east jerusalem. he and his cousin were linked to a stabbing, sentenced to 12 years, where his family says he is suffering trauma. russia has confirmed fire aboard a warship. the defense ministry says munitions exploded. the ukrainian military says it struck the warship with missiles. russia says it is now in full control of the port in mariupol, but ukraine denies this. it says russian forces are covering up war crimes. the u.s. is sending an additional $800 million of assistance to ukraine, including howitzer cannons and 40,000 artillery rounds, plus javelin missiles and systems.

we have more from washington, d.c. >> this is significant. we are seeing the u.s. is willing to provide more for ukraine. there are reports that u.s. is looking at the intelligence it has been sharing with ukraine and looking to expand that, including possibly showing russian vocations in the donbas. if they do, they will probably not confirm that publicly. anchor: police in michigan have released several videos showing the fatal shooting of a black man in a traffic stop. the 26-year-old was killed on april 4 after what officers described as a lengthy struggle. those of the headlines. the news continues on "al jazeera." that is after this. ♪

>> sri lanka defaulting on its foreign debt, its worst economic crisis in decades, and growing public anger, but what does it mean and will there be political fallout? this is "inside story." ♪ anchor: hello. welcome. the economic crisis in sri lanka appears to be getting worse. the government has been forced to default on its entire $51 billion of external debt. there has been a shortage of food, fuel, and schools have had

to cancel exams for a leica paper, leading to -- lack of paper, leading to protests and calls for government officials to resign. our guests in a moment, but now, this report. >> this is the hub. it is teaming. you can see that they are selling sarongs. another one here where people are trying to buy something for the new year, but down here, reminder of the situation, a generator just to keep things running for the power because many, many people are suffering with power cuts, just one of the issues that is the reality of the economic crisis that sri lanka is going through, and we are just hearing from the government that they have decided in the interim to stop debt repayments in the process of going to the imf, looking to restructure their debt, so that

announcement has come today. some economists say this is far too late in the coming. they have been asking for it for months and months, and the government insisted that it was in control, but now deciding to put a halt in the interim and restructure debt. >> [speaking in foreign language] translator: everything has gone up in price. they are so expensive. >> the question is, is it enough? for months and months, economists, opposition politicians have been asking the government to put a hold on debt repayments to negotiate a plan default. meanwhile, to save the precious foreign currency. it is so, so depleted. that is what has led to all of the shortages, fuel, cooking gas, food, medicine, and that is what has been the rallying cry to the government. anchor: what does it mean for

sri lanka to default on external debt? it happens when it fails to pay an international loan when it is due. sri lanka's foreign currency reserves have plunged below $1 billion, limiting its ability to repay loans. a default can lead to lower credit scores, reducing chances obtaining credit in the future, and higher interest rates on existing and new loans. ♪ to discuss this, let us bring our guests. the executive director of the national peace council of sri lanka, a political economist and senior lecturer at the university in sri lanka, and for melbourne, a researcher at the school of education at a university in australia. welcome. thank you for joining us on "inside story." over to you first, so now that sri lanka has announced it is defaulting on its foreign debts,

does this stop the downward spiral? >> yeah, it is to be seen how the markets will react. this is unprecedented. sri lanka has never defaulted on external loans. this might start a spiral of difficulties, gaining credit in internatational markets. it might lead to difficulties with financial transactions. the question is also why did it come about at this point? the government had plenty of time over the last two to shore up its foreign reserves. last year, it had its highest imports, $41 billion, so rather than saving some of that for a situation like this, they continue to spend. the other question that sri lanka is going from negotiations

with imf next week, why did we have to default just one week ahead of going into negotiations with the imf? does that reduce the bargaining power sri lanka has? so a lot of questions, and a lot about this process, as well as the implications. they claimed that with the imf support, they can repay these loans, but if they are unable to reach an agreement, and what will be the consequences for the people? austerity? anchor: right. important points. important points. let me bring in someone else. if this imf program goes ahead, it would be the 17th financial rescue package from the global lender, and it does come with strings and conditions attached. why is this imf loan going to work when the country has already had 16 in the past?

>> the significance of this default is that sri lanka's currency has also been precipitously falling, by close to 100% in the last two months, and we are also going to countries, foreign countries such as india, bangladesh, china, asking for loans to tide over the next month, so in a sense, the government taking this action of preserving whatever foreign exchange it has by not repaying the debt is to the people, it will be something that is welcome, because they do want the petro, diesel, huge lines are stretching for a kilometer or more every day, people stay overnight in these

destinations, waiting to fill their vehicles, tractors, combine harvesters, because they can't do their farming properly, so for people, the importance is the government should have money to import the essentials. there is no medicine now in the hospitals. the doctors say there is not medicine in the spindles. so -- hospitals. so -- anchor: so what you're saying is this a good move on behalf of the government to show the people they're actually doing something? >> will, it is a double-edged sword. up to now, the government was not doing anything. now at least they have taken some decisive step. they appointed a new central bank governor. the earlier person was and don't worry we will somehow get the money and we will repay our debt and manage within the country. now we have a new person who is also increasing the interest rates very considerably, because

that is the way to i think restore some confidence in people to at least save the money. they have been printing money. they have been printing enormous amounts of rupees these past few months, and that has also contributed to the downward spiral, so it is a context of bad economic management, and now this. anchor: ok. ok. let me bring in someone else for melbourne. what do you think about the imf loan if it goes ahead? is this going to be good enough for the people? as we have been hearing, the imf loans come with painful policies. the people have been feeling pain on the streets. we have seen the protests taking place, so how would the sri lankans be reacting to this news do you think? >> i think how they react to the news with the pen -- will depend on the fact whether these loans were negotiations are going to be felt on the ground, because

what we are seeing is something that is unprecedented. there are power cuts, fuel shortages, gas shortages, spiraling price hikes, all of these things have come together and they are felt by every citizen, so whether this, these loans, these negotiations with the imf and with individual countries, whether they are really going to make an impact is whether these shortages are going to reverse and any rate if the power cuts are going to become shorter, if the gas lines are going to be shorter, if we can find fuel without staying in line for half a day or even more , that is what is going to change, the mood on the ground, because these protests we are seeing, they are coming about

because everyone in sri lanka except for a very, very small minority are feeling the impact of the economic ■crisis. you cannot go through a day when there is a 13-hour power cut, and then you can't, so it would depend on whether these negotiations and loans are going to be felt by the people. anchor: ok, let us step back a moment before we look at how this is impacting the family, but just tell us what has caused this economic crisis and whether it can be pinpointed at one thing or is it several things over the years? >> it is several things over the years. definitely the war in ukraine and the rising commodity prices have increased our import bill. the pandemic and destruction of her tourism sector has had its impact, but really this is a long, drawn crisis where sri

lanka has been living beyond its means. we have been floating in sovereign bonds in the capital markets, and so that is the question, the agreement we are in the process of, because we are already implementing any of the recommendations of the imf, but whether that is only going to -- this issue, first without restricting imports, because our foreign exchange is -- if you look at the measures we have taken already, the last imf report that came out on march 25, we have floated our exchange rate, but that depreciation is borne by the people. they have to pay 50% more for the items. they have increased interest rates and a lot of businesses will go bankrupt because they have doubled the interest rates. they don't have working capital. now as the imf recommended that they will restructure the default, that --

anchor: right. let me ask you this, what more could the government have done? as you were saying, there is, we saw the rise in the cost of fuel, the coronavirus lockdown, as a result, a drop in tourism, so there were a lot of external factors that battered sri lanka. >> exactly. the first thing the government should have done is to prioritize -- [indiscernible] they are talking about prioritizing essential goods and not defaulting on the loan, but in the last year, we have had imports of luxury items. they need to have a public distribution system. all of that was dismantled when sri lanka went to the imf. even though we have gone through 16 imf agreements with this one will be as consequential as when we opened up the economy, and

since then, it has grown from the development around colombo, and these protesters coming out, the reaction against such inequalities in our country and the disruption of services, that these reforms that are likely to take place, my worry is the burden is again going to be on the people. anchor: ok. do you agree with what is being said? also, we have seen much of the anger recently expressed in terms of protests in such direct it at the family, who has been in power for decades, of the criticism is the government failed to take basic steps under warning signs. is that something you agree with? >> yes, i would like to add two further points. the first is that as he said, we were living beyond our means. you know what we had a war in

our country for three decades. a lot of money was invested in the war. there was a lot of destruction that also took place. but we did not really suffer a reduction in our living standard , as we saw it. maybe we did not develop as fast as other countries did, but our living standards did not drop. they rose. how? we took these loans. we took these loans, first from the institutional lenders within from the private sector, the commercial lenders, then we lived beyond our means. that is one thing. we need to keep in mind. the second thing is the people are really, they are really focusing, what they're focusing on is there is a belief that the family has taken the money, that they have stolen this money, and that they were the people behind it. we know that not only the family, but the entire political system is extreme corrupt, and

we have known for a long time that there were commissions being taken by politicians. we know for instance that there are such huge investments that have been made. it has been with the chinese loans. we have the tallest building in south asia, which is empty, which has not been functional for several years. we have an airport in the south of the country, a stronghold, where there is an electoral seat, which hardly has any airplanes coming. we have a port where we expect someone to come, and only 50 or 60 ships come in which we now have two police to the chinese for 99 years. so there is this corruption, lack of accountability, and people are now planning the family and focusing on the family, and they want these people to go because they think they are the ones who have done this damage but it's not only the family and in fact, i think the entire government, and that

is affecting all the people, the protesters, and they say we want all 225 mps to go. this is an exaggeration on their part, what they really mean is they went the corrupt mps to go. anchor: ok, this is something the president himself can survive? he has called for talks with protesters. is that likely to appease the protesters at all? >> well, i mean, the reaction from the protesters, in fact, it was the prime minister who wrote an open letter saying he would like to open discussions with the protesters, and the protesters have quickly, some of the protesters have quickly reacted to say we are not going to talk unless our demands, which is the president resigns in all the family in government, so the anger of the protesters are directed at the family.

one thing we need to understand is that administration really came into power, it actually promised a change. its slogan was system change. what it said is we will change the system that has been in place, which people said was corrupt, which did not deliver equally to all sri lankans, so they came on the platform that they were going to deliver, to change the system, and instead what has happened is instead of any kind of improvement, things have regressed more than anyone has seen in their lifetime, so what we are seeing is the anger boiling over and the family have become the target, because for the better part of the last two decades, they have been the most powerful clan in sri lanka. anchor: ok, look, the opposition, the opposition is

also pouncing on this. they are hoping to hold some sort of no-confidence vote, but the opposition's weekend and they don't have a majority and have not taken control of parliament, so what did they do? >> i think the real interesting thing in this protest is that these protests are taking place without a political party, politicians, political structure guiding them on giving them momentum, so the opposition cannot expect to gain power or to form a government through these protests, because the protesters are in fact saying we want this whole system change, but for starters, they want the government that is in place to change so that some change will be made in the situation can be changed, so it is quite a unique

situation that is happening in sri lanka, but we are seeing that protests, not this large, in the past, they have always been led by a politician, political party, or at least a political slogan. now here, these protests are organic. people are pouring onto the streets without being prompted by politicians. so it will be very difficult for one political party to gain momentum from this, but it most totally mean one political power family would be at the receiving end of this. anchor: how challenging is it going to be to dismantle this deep-rooted corruption in the system, as what is being described by my guests from colombo. ? ? >> yes, of course there is const corruption, but the crisis itself has also been the

consequence of the economic trajectory we have been on. the kind of investment that he talked about, infrastructure, but these are the programs that many sri lankans have also recommended, and with this imf agreement, the question is whether people will continue investing. we -- [indiscernible] sri lanka is now going through a food crisis. agriculture, the food system, there needs to be a shift in the trajectory of our economic policies, and with that happen? this is a crisis that is bound to bring about major political and economic changes to whether we like it or not. at the moment, the anger is against the family. the president is going to have to go sooner or later. i think that -- but what would

come after that? with this, it is similar to 1977, and the imf agreement that leads to further suffering of the people. we might see a swing to the right. we might even have a fascist group that emerges if we don't satisfy the people, because people have lost much, so my worry is the current trajectory with the imf is going to bring about more suffering and give space for other kinds of repressive political or populist actors to emerge rather than septra like on the path of democracy. anchor: right, ok, we have spoken about the protestant people coming out, but you are in colombo. give us a real sense of what life is like today for ordinary sri lankans who are trying to make inns meet.

-- ends meet. >> it is a holiday. we are approaching the new year. it is quiet. in the area near the presidential area, there are lots of people, lots of young people, and they have made it sort of like a festival of democracy. they are talking democracy, ideas, doing skits, and keeping their spirits up. it is raining very heavily in colombo. as for the rest of the population, they are actually, they are not traveling. most of us during this time, we want to travel back to our villages, and we can't do that because there are no buses. there is a shortage of diesel to fuel the buses from so many people are just staying in their homes, and of course they are going shopping. they are shopping, but as we saw

in the footage earlier, the prices have risen tremendously, so people are really suffering, and at the moment, it is the poor people who are paying the price, but because they are using their food intake, for instance, but later on, it is going to hit the others also. it is also hitting us in the sense that these power cuts, which are unbearable. anchor: what you think is going to happen next? how would out? >> what i would like is to change the system and the constitution, and for that, it requires that the parliamentary majority should shift. already, 14 members of the ruling government have opted to become independents, but they may still be aligned to the government, but when they see these protests are not stopping

and they see the widespread nature of the desire for a change in the leadership, that they will shift, and as a consequence of that shift, what i would like to see, because the president is not going at the moment, what i would like to see is a constitutional amendment bringing back constitutional amendment we had which was overwritten by this president. as soon as he came to power, he came to the 20th amendment and with concentrated power in itself, and he wrote that the independence of the judiciary and other institutions like public service, i would like to see that amendment repealed. it will pave the way for reform in the future. anchor: ok. thank you we have to leave it there appeared thank you for joining us. -- we have to leave it there. thank you for joining us thank you for watching good you can see the program any time by visiting our website. for further discussion, you can go to our facebook page

facebook.com/ha inside story. you can join the conversation on twitter as well. for myself and the entire team here, things for watching. goodbye for now. ♪ ñçñqñqñqñqññññ#ñ#wwñ?ñ?o7ñ;ñ;?k

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