President Ranil Wickremesinghe has acknowledged that there was no point in economic reforms in Sri Lanka because the cash-starved island nation didn't have an economy, as he made a strong pitch for a new economic model.

Sri Lanka is going through its worst economic crisis since its independence in 1948, triggered by a severe paucity of foreign exchange reserves.

In mid-April, Sri Lanka declared its international debt default due to the forex crisis.

Addressing the inaugural session of the Sri Lanka Economic Summit 2022 on Monday, Wickremesinghe said the country's beleaguered economy cannot be set right through outdated economic systems.

As Sri Lanka's economy went into a perpetual tailspin in recent times, Wickremesinghe acknowledged that economic reforms were not the antidote for the current malaise.

“What is the plan for reform? Frankly, I have no plan for it. What reforms when we don’t have an economy,” the Daily Lanka Mirror newspaper quoted Wickremesinghe as saying.

"What we want to do is to build a new economy," he explained.

The current economy is not worth reforming because it is so fragile that it will crumble again, the report quoted him as saying.

“Our trade balance is not in our favour. So are we going to rebuild the same structure and come down again much faster? Therefore I thought it's not worth reforming it," Wickremesinghe said.

Bolstering the foreign exchange reserves would be the key reform goal for our government, Wickremesinghe said, adding that developing Sri Lanka as a logistics centre was also the need of the hour.

Colombo seeks to secure the release of a USD 2.9 billion rescue package from the IMF, which was announced in September.

For this to happen, Sri Lanka must restructure its debt.

“We are now discussing with our creditors, bilateral creditors, with India and we had very successful talks and we have started talks with China," Wickremesinghe said. He said the development of Colombo Harbour’s west terminal with India’s Adani group was a pragmatic move.

“If you want to get going you have to give the East terminal out. We have given the first choice to Japan, if they don’t we will ask others to come” he added.

The Sri Lankan government in May appointed international legal and debt advisors for debt restructuring after the country declared its international debt default for the first time in history.

Sri Lanka is nearly bankrupt and has suspended repaying its USD 51 billion foreign debt, of which it must repay USD 28 billion by 2027.

Sri Lanka, a country of 22 million people, plunged into financial and political turmoil earlier this year as it faced a shortage of foreign currencies.

Due to this, the island nation has been unable to afford key imports, including fuel, fertilisers and medicines, leading to serpentine queues.