Sri Lanka Crisis: Focus On Protecting The Vulnerable, Says PM Gunawardena To IMF In Bailout Talks

Sri Lanka is negotiating with the IMF for a bailout package aimed at driving the country out of its worst economic crisis that it currently faces.

People wait for fuel as Sri Lanka faces acute shortage of essentials amid its worst financial crisis

Sri Lankan Prime Minister Dinesh Gunawardena has requested the International Monetary Fund (IMF) to focus on protecting the econimically vulnerable groups in the country during the bailout talks. 

Sri Lanka faces acute foreign exchange shortage and is going through its worst economic crisis. The debt-ridden country is currently seeking a bailout from the IMF, for which an IMF team is in the country. 

Gunawardena has requested the IMF to focus on protecting economically vulnerable groups in Sri Lanka, Colombo Page news portal reported on Sunday. He made this request when the visiting IMF team met him and held discussions at the Prime Minister's Office. He also apprised the IMF team of the economic challenges in the country and the measures taken by the government to reduce the difficulties faced by low-income earners.

Sri Lanka had announced in April that it is suspending nearly $7 billion foreign debt repayment due for this year out of about $25 billion due through 2026. 

Gunawardena explained the measures taken by the government to reduce non-essential imports and increase export products and the measures taken by the government to increase welfare for the poorest sections of the society.

Peter Breuer, Head of the IMF’s Negotiation Panel, said that his team will discuss with the government, the opposition and other parties and report the facts to the headquarters in Washington. The IMF representatives also explained the facts about taking protective measures for vulnerable groups in preparing plans for debt restructuring and economic revival.

Dr Masahiro Nozaki, Head of Mission of the IMF, has agreed that taking protective measures for economically vulnerable groups is an essential requirement when preparing plans for debt restructuring and economic revival, as pointed out by Gunawardena.

An IMF team met Sri Lanka's President Ranil Wickremesinghe on Wednesday for talks on a bailout package. Debt restructuring is a prerequisite for the IMF facility.

The 22 million people of Sri Lanka are facing great difficulties because if economic crisis. Prices have skyrocketed in recent months and goods are in shortage including several essentials such as cooking gas, vehicular fuel, and even medicines and foodstuff at times, forcing people to stand in long lines at fuel stations. Sri Lanka was also plunged into long power cuts as the country ran out of fuel to generate thermal power. 

Sri Lankan government is currently scrambling to chalk out a staff-level agreement with the IMF for a bailout programme, which could be the antidote for the country’s current economic travails.

(With PTI inputs)