The International Monetary Fund said on Saturday that its staff held “fruitful technical discussions” with Sri Lankan authorities on the crisis-wracked country’s request for an IMF-supported loan program this week.
The Fund said in a statement that the discussions included the need for Sri Lanka to implement “a credible and coherent strategy” to restore macroeconoimc stability and to strengthen its social safety net and protect the poor and vulnerable during the current crisis.
“The IMF team welcomed the authorities’ plan to engage in a collaborative dialogue with their creditors,” IMF Sri Lanka mission chief Masahiro Nozaki said in a statement.
Demonstrators holding placards take part in a protest against Sri Lankan President Gotabaya Rajapaksa, near the Presidential Secretariat in Colombo (REUTERS)
Here are some of the top developments:
🔴 Prez Rajapaksa seeks global investments, financing for economic recovery
Sri Lankan President Gotabaya Rajapaksa on Saturday said that the crisis-hit country welcomes investments, technology transfers and financing for its sustainability efforts and cooperation for debt restructuring to support the economic recovery during this critical time.
Gotabaya, addressing the 4th Asia-Pacific Water Summit in Japan’s Kumamoto via video link, said that despite considerable resource constraints, made far worse through the pandemic and the ongoing financial crisis, the island nation’s commitment towards development and sustaining a progressive agenda on the environment remains unchanged, the Daily Mirror newspaper reported.
“Sri Lanka welcomes investments, technology transfers and financing for our sustainability efforts, as well as broader development assistance and cooperation for debt restructuring to support our economic recovery during this critical time,” it quoted the embattled President as saying.
🔴 Defiant PM says he won’t resign; will also head any interim govt
A defiant Sri Lankan Prime Minister Mahinda Rajapaksa on Saturday dismissed calls to form an interim government to tackle the unprecedented economic crisis in the debt-ridden island nation, saying he would anyway head any such dispensation if it is required.
Speaking to radio station ‘Neth FM’, the prime minister said: “What use of interim governments when people with varying policies can’t see eye to eye? There has to be accord which is not possible. If there is a need for an interim government it should happen only under my leadership.” Anti-government protesters in Sri Lanka are demanding the resignation of President Gotabaya Rajapaksa and his elder brother Prime Minister Mahinda as they blame the government policies for the worst forex crisis.
Prime minister Rajapaksa said he wasn’t aware personally of anyone calling for his stepping down. “Even if there are demands for my resignation, it would not be from the majority, it will be from a minority group who wouldn’t know the political history of the country,” he asserted.
A demonstrator holding placard takes part in a protest against Sri Lankan President Gotabaya Rajapaksa, near the Presidential Secretariat in Colombo (REUTERS)
🔴 India extends additional USD 500 million credit line for purchasing fuel
India has agreed to extend an additional USD 500 million credit line to help Sri Lanka import fuel, Finance Minister Ali Sabry said, amid delays in chalking out a bailout package with the IMF to mitigate the dire financial crisis facing the island nation.
Sri Lanka has been struggling to pay for imports after its foreign exchange reserves plummeted sharply in recent times, causing a devaluation of its currency and spiralling inflation.
“India has agreed to provide an additional USD 500 million for our fuel imports,” Sabry said on Friday, while adding that he was hopeful that New Delhi would consider handing out another USD 1 billion dollars as a credit line. India has already agreed to defer USD 1.5 billion in import payments that Sri Lanka needs to make to the Asian Clearing Union. On Friday, New Delhi has also extended the tenure of a USD 400 million swap given in January this year, the Indian High Commission said.
A view of tents in a protest area, dubbed the Gota-Go village, as people are gather in opposition to Sri Lanka’s President Gotabaya Rajapaksa near the Presidential Secretariat in Colombo (REUTERS)
🔴 India, IMF consider $2 billion aid
As Sri Lanka continues to grapple with its worst-ever economic crisis, several neighbouring countries, including India and China, have said they will extend support to the island nation to help it continue essential imports. The World Bank and International Monetary Fund (IMF) are also set to provide relief packages to tide over the crisis.
Sri Lanka’s Finance Minister Ali Sabry on Saturday announced that India and the World Bank are considering extending about $2 billion in bridge finance to the island nation, which has been struggling to pay for the import of essential items, including medicine and fuel. In a bid to secure funds, Sri Lanka has been reaching out to several creditors to restructure its debt and also approached China and Japan for help, Reuters reported.
🔴 World Bank to extend $300 million to $600 million over next 4 months
Meanwhile, the World Bank is extending $300 million to $600 million over the next four months so that the country can secure medicine and other essential items, Sabry said. Sabry, who is still negotiating a rescue package with the IMF, said while talks with the international lender might take some time, the World Bank has agreed to provide support in the meantime, AP reported.
Demonstrators take part in a protest demanding justice for K.D. Chaminda Lakshan who died after getting caught up in a clash as he went to the petrol station at Rambukkana to fill his motorcycle, in Colombo (REUTERS)
🔴 China has agreed to support Sri Lanka: PM
On Friday, Sri Lankan PM Mahinda Rajapaksa said that China had agreed to support his government after a “very productive” conversation with his Chinese counterpart Li Keqiang, PTI reported. “Had a very productive conversation with Chinese Premier Li Keqiang. I reiterated #SriLanka’s gratitude to #China for the longstanding friendship and for assuring support to address some of the crucial needs affecting peoples’ livelihoods and well-being in these difficult times,” Rajapaksa tweeted.
On the brink of total bankruptcy, Sri Lanka has to pay nearly $7 billion of its total $25 billion in foreign debt this year. Due to the severe shortage of foreign exchange, the country hasn’t been able to buy imported goods.
As Sri Lanka sinks deeper into the crisis, the country’s otherwise thriving tourism industry has also been hit. While tourism hit a two-year high in March, with 100,000 arrivals, restaurant and hotel owners fear that the ongoing economic crisis will prevent a more robust revival in the near future, according to a Reuters report.
Demonstrators shout slogans against Sri Lankan President Gotabaya Rajapaksa, near the Presidential Secretariat in Colombo (REUTERS)
🔴 PM says made mistake by not attending meeting on Rambukkana violence
Thousands of ordinary Sri Lankans have taken to the streets to protest against power cuts and essential food shortages. One such demonstration in Rambukkana left one protestor dead and 13 injured earlier this week after police officials opened fire to suppress the protests. Embattled Prime Minister Mahinda Rajapaksa admitted on Friday that he made a mistake by not attending a National Security Council’s meeting over the incident.
“I was invited. But I did not attend. It’s my fault. But I was briefed on the progress that evening,” the Prime Minister told Parliament. The Sri Lankan police transferred three top officers for their alleged misconduct in Rambukkana, PTI reported.
Several have also chosen to flee the country. In fact, 18 more Sri Lankan nationals who fled the crisis-hit island republic arrived in India on Friday, with the hapless families who landed at Dhanushkodi in the wee hours being accommodated at the Mandapam refugees camp.
(With inputs from agencies)
