Sri Lanka currently faces its worst economic crisis in seventy years, leading to shortages of food, medicine and fuel.
Colombo: In Sri Lanka, main Opposition party Samagi Jana Balawegaya vowed in the Parliament on Friday that it would not let the government sell their national assets to redeem its loan obligations to China.
While participating in the debate on the interim budget, SJB MP Lakshman Kiriella said, “We need 12 billion US dollars per year to settle loans until 2025. How is the government going to cover the balance? Are they planning to give away national assets to redeem the loans to other countries? China too has recently stated that they were ready to take over those assets in place of defaulting loans. China had done so in other countries. The Southern Expressway, the Mattala Airport and the Katunayake Expressway are to be given away.” He further added that even if International Monetary Fund (IMF) extended its assistance, it would be only three billion US dollars and that amount would not suffice to cover the loan obligations of the country, according to The Island.
Kiriella further stated that the main reason for the present crisis was the loss of foreign exchange reserves.
Talking about the elections, SJB MP said, “Rather than making plans to stay in power, the government should allow the people to elect a government. The international community prefers to work with a legitimate government.”
Kiriella noted that the government must understand that not even a bankrupt company would be entitled to a loan from a bank if they do not change the board of directors. He further stated that the government has failed to implement the political and economic reforms that it has agreed upon, reported The Island.
Even the diplomatic community in Colombo has asked the government to implement political and economic reforms, SJB MP added.
Earlier, the IMF said that their team and debt-ridden Sri Lankan authorities Thursday reached a staff-level agreement to support Sri Lanka’s economic policies with a 48-month arrangement under the Extended Fund Facility (EFF) of about USD 2.9 billion.
The IMF mission led by Peter Breuer and Masahiro Nozaki visited Colombo from August 24 to September 1, 2022, to continue discussions on IMF support for Sri Lanka and the authorities’ comprehensive economic reform programme.
“The Sri Lankan authorities and the IMF team have reached a staff-level agreement to support the authorities’ economic adjustment and reform policies with a new 48-month Extended Fund Facility (EFF) with a requested access of about SDR 2.2 billion (equivalent to USD 2.9 billion),” said Breuer and Nozaki joint statement.
Sri Lanka’s new Fund-supported programme aims to restore macroeconomic stability and debt sustainability while safeguarding financial stability, protecting the vulnerable, and stepping up structural reforms to address corruption vulnerabilities and unlock Sri Lanka’s growth potential, read the IMF press release.
Debt relief from Sri Lanka’s creditors and additional financing from multilateral partners will be required to help ensure debt sustainability and close financing gaps.
Sri Lanka currently faces its worst economic crisis in seventy years, leading to shortages of food, medicine and fuel. The island nation’s worst economic crisis in seven decades led to a shortage of foreign exchange that stalled imports of essential items such as fuel, medicine, and fertilizer.
(Except for the headline, this story has not been edited by HW News staff and is published from a syndicated feed.)
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