SL seeks USD1.5 bn stand-by arrangement
from IMF
By Shamindra Ferdinando-March 17, 2016, 7:20 am
Sri Lanka is seeking USD 1.5 bn under IMF stand-by-arrangement to stabilize the national economy reeling under both internal and external factors, Special Project Minister Dr. Sarath Amunugama said yesterday.
Until Sri Lanka could obtain the IMF facility by June/July this year, India threw its weight behind the government to consolidate its foreign reserves, Dr Amunugama said. With Indian backing Sri Lanka could enhance its foreign reserves to USD 6.6 bn, Dr Amunugama said.
The minister was addressing the media at the Information Department. He was flanked by State Minister for Finance Lakshman Yapa Abeywardena.
The media was told that IMF assistance was required to tackle a widening balance of payment deficit.
Dr. Amunugama compared the IMF bailout packages obtained by the previous Rajapaksa administration during 2009 and the facility sought by the Sirisena-Wickremesinghe government. Western powers strongly objected to the IMF coming to Sri Lanka’s rescue at that time. Western powers wanted to thwart the IMF package to pressure the then President Rajapaksa to call off the offensive against the LTTE.
Sri Lanka brought the war to a successful conclusion on May 19, 2009.
Since then Sri Lanka’s relationship with Western powers and the IMF had changed, Dr. Amunugama asserted.
The retired veteran civil servant acknowledged that the government was under pressure to meet its financial obligations.
The Special Projects Minister attributed Sri Lanka’s predicament to several domestic as well as external factors. The annual remittance from Sri Lankan workers in the Middle East had been reduced by as much as USD 1 bn due to turmoil there, Dr. Amunugama said, adding that slowing down of Chinese and Indian economic growth and a stronger US economy had affected Sri Lanka, the minister said. Asked to explain, Dr. Amunugama said that the US recovery had prompted many investors to re-invest there at the expense of other countries, including Sri Lanka and China.
Dr. Amunugama said that the resumption of the Chinese-funded Colombo port city project worth USD 1.5 bn would be a big boost to the national economy. Mentioning Prime Minister Ranil Wickremesinhe’s forthcoming visit to Beijing, Minister Amunugama said that Sri Lanka was confident of transforming Hambantota to a Chinese zone with about 100 factories. Minister Amunugama also discussed proposed expansion of Indian investment meant to facilitate the new administration’s efforts to create employment here.
He also explained certain specific measures taken by the government to provide relief to the agriculture sector in spite of difficulties experienced by the government.
