By PTI
COLOMBO: The World Bank is planning to disburse USD 700 million to crisis-ridden Sri Lanka by re-purposing its existing loans, a move that will help the island nation grappling with an unprecedented economic crisis and much-needed breathing space till a bailout package with the IMF is worked out, media reports said on Monday.
Sri Lanka is nearing bankruptcy and has severe shortages of essentials from food, fuel, medicines and cooking gas.
For months, citizens have been forced to stay in long lines to buy the limited stocks.
The World Bank Country Manager Chiyo Kanda met Sri Lankan Foreign Minister last week and assured him that the agency will work with the Asian Development Bank (ADB), Asian Infrastructure Investment Bank (AIIB) and the UN office to “re-purpose their already committed projects,” news portal Colombo Gazette reported.
“Minister Peiris sought assistance from the World Bank until long-term assistance materialises through the IMF, other international institutions and donor countries,” the report said, quoting a statement from Sri Lanka’s Foreign Ministry.
ALSO READ | India sends 15,000 litres of kerosene for fisherfolk in crisis-hit Sri Lanka
Consequently, Kanda has assured Peiris that the global lender would disburse USD 700 million to Sri Lanka in these difficult times in the coming months, the report said.
Earlier this month, the International Monetary Fund (IMF) said it remains committed to assisting Sri Lanka in line with its policies, the Colombo Gazette reported.
Technical-level discussions with Sri Lanka have commenced.
They will continue in order to prepare for policy discussions once a new government has been formed, the IMF was quoted as saying by the report.
“On our virtual mission during May 9-23, discussions at the technical level have just started and continued as planned so as to be fully prepared for policy discussions once a new government has been formed,” the IMF said in a statement.
The IMF also said that it is following developments in Sri Lanka closely and is concerned about rising social tensions and violence.
In April, the two sides convened their first round of talks at the IMF headquarters in Washington.
Sri Lanka is hoping for a Rapid Finance Instrument (RFI) facility as well as a larger Extended Fund Facility (EFF) from the international financial body to help it deal with its foreign currency shortages, which have triggered an economic crisis.
In the last meeting, the IMF assured to help the country with an amount of USD 300 million to USD 600 million.
On April 12, Sri Lanka suspended its debt servicing for the first time in its history.
The island nation has been facing its worst economic crisis since its independence from Britain in 1948.
The economic crisis has also triggered political unrest with a protest occupying the entrance to the president’s office demanding his resignation has been continuing for more than 50 days.
Meanwhile, Sri Lanka’s Foreign Minister GL Pieris has briefed the US Ambassador Julie Chung on the proposed 21st Amendment to the Constitution and also held wide-ranging discussions on bilateral relations and assistance from the international community in mitigating the island nation’s worst economic crisis, according to media reports.
ALSO READ | Cash-strapped Sri Lanka gets Russian oil to ease shortages
The 21st Amendment is expected to annul the 20A to the Constitution, which gives unfettered powers to President Gotabaya Rajapaksa after abolishing the 19th Amendment that will strengthen Parliament in governing the country.
“The Foreign Minister encouraged continued support from the US and other countries, both bilaterally and through multilateral channels, to mitigate the economic challenges in Sri Lanka,” economic and political news portal EconomyNext reported on Sunday, quoting the Foreign Ministry statement after the meeting with Ambassador Chung.
He also briefed the Ambassador on the discussions with different political parties with regard to the draft 21st Amendment to the Constitution.
On Sunday, during a special televised address to the nation on the current constitutional reforms programme, Prime Minister Ranil Wickremesinghe said the 21st Amendment when approved by the Parliament would help Sri Lanka in several ways.
He underlined the need to strengthen the existing laws to give more authority to Parliament in the exercise of monetary powers.
“Following the example of countries such as the United Kingdom, New Zealand, and India, we are proposing a stronger and more powerful law,” he asserted.
The Foreign Minister has said the government is focused on exploring all avenues in the provision of short and long-term solutions in alleviating the difficulties encountered by the citizens and in the implementation of a clear plan of action, the news portal Colombo Page reported, quoting a statement from the Foreign Affairs Ministry.
Peiris stressed that Sri Lanka is deeply appreciative of the goodwill and assistance being received from the international community including from multilateral organisations, the report said.
In response, Ambassador Chung stated that the United States is a friend of Sri Lanka and is well aware of and understands the challenges in the country, the statement said.
ALSO READ | Protest seeking resignation of Sri Lankan President Gotabaya Rajapaksa enters 50th day
“She stated that the United States will continue to support Sri Lanka during this difficult time,” it added.
Sri Lanka is also currently seeking International Monetary Fund assistance.
Sri Lanka is near bankruptcy and has severe shortages of essentials from food, fuel, medicines, and cooking gas to toilet paper and matchsticks.
For months, people have been forced to stay in long lines to buy the limited stocks.
The island nation has been facing its worst economic crisis since its independence from Britain in 1948.
The economic crisis has also triggered political unrest with a protest occupying the entrance to the president’s office demanding his resignation has been continuing for more than 50 days.
