IMF not expected to discuss Sri Lanka before year-end – sources
The executive board of the International Monetary Fund is not expected to formally approve Sri Lanka’s $2.9 billion bailout before year-end, a key step required for the embattled country to receive funding, two sources familiar with the matter said.
Seeking a way out of its worst economic crisis in decades, Sri Lanka reached an IMF staff-level agreement in June with the deal subject to approval and contingent on Sri Lanka authorities following through with previously agreed measures.
Sri Lanka said in September it expected the board to approve the deal by year-end. Progress has been slow in recent months, and Sri Lanka’s finance minister acknowledged last month the request might extend into January.
Sri Lanka has to secure prior financing assurances from creditors, put its heavy debt burden on a sustainable path and increase public revenue before the global lender will disburse the funds. The IMF stressed the importance of joint talks involving three of Sri Lanka’s main bilateral creditors – China, Japan and India.
The IMF’s online board calendar, which has added meetings through Dec. 22 to discuss progress and new tranches for a number of emerging economies, makes no mention of Sri Lanka.
In response to an inquiry, Sri Lanka’s finance ministry said it was “100% focused” on securing IMF approval.
“We are taking every necessary policy step to secure financing assurances from our bilateral creditors as quickly as possible,” the ministry said in an emailed statement.
IMF officials for Sri Lanka said in emailed comments to Reuters it was “difficult to predict the timeline for the Board approval, as the process of debt discussions takes time.”
Sri Lanka said in October it aimed to nearly double its tax revenue to around 15% of gross domestic product by 2026 from 8.5% now – one essential step to unlock IMF funding.
(Reuters)
Latest Headlines in Sri Lanka
- Sri Lanka welcomes 2 millionth tourist, marking historic milestone December 26, 2024
- Sri Lanka Police introduces nighttime traffic rules to enhance safety December 26, 2024
- Today marks 20 years since 2004 Tsunami Disaster December 26, 2024
- Wasantha Handapangoda passes away December 25, 2024
- PM Harini Amarasuriya calls for togetherness, gratitude, and peace this Christmas December 25, 2024
Should have stuck with China and continued the infrastructure projects instead of “National Aragalaya” ! Said so always!! Now, humiliated before the whole world, people from no other (specially capitalist) country has any respect for the ‘pennnyless beggers” Srilankans visiting or working in those countries, and have to obey all the orders imposed by US, UK EU and NGOs. Haven’t the thugs in Peradeniya yet hone to the SL Human Right Commission to get their HRs protected?
China came to the party at talks between the Chinese PM and the IMF Chief where China agreed with the EU proposition for a 10 year debt moratorium.
Though debt repayments including interest accrued will be heavy after 10 years, the 10 year window gives an opportunity to focus on growth and diversification.
In the past months, SL has survived and has been able to provide basic services including wages to public servants on export earnings, tourism, worker remittance and local taxes. That’s a good sign of self-reliance.
Professional unions are complaining of high income tax. In developed overseas countries, workers are effectively taxed heavily unless you are toilet cleaner or a street sweeper earning cash under the counter.
SL should approach the WB/IMF for a special fund to support redundancy payments to public servants to achieve 40-50% reduction in numbers. The economy will benefit from this with redundancy monies coming into it in the form of investments and enterprises.
I fully support the divestment of State Owned enterprises, both profit making and loss making. The Govt is not a business manager; the Govt is for governance including regulation.
Roxie’s brilliant idea of seeking a WB/IMF Fund to pay redundancy payments to the lower levels of public service (min 3 years pay, max 10 years pay based on a length of service formula) will definitely help in downsizing the ineffective Public Service by more that 50%.
This will help the Public Servants as well as the economy and the Wage Bill of the Govt.
Let us hit the target without much cushioning or putting icing sugar around. Cut down the RATE OF BREEDING. That is the cause. Look at the rate of population increase in Sri Lanka. No kallathoni or anybody else have come from outside to take residence in the paradise. All produced at home. Not only lack of jobs, it pollutes, destroy and over-utilize the environment and resources (sand business and the plight of elephant are some examples) and destroy the few things we have left to attract tourists. Also, reduce the land available for cultivation and make those who are not going abroad to earn unable to buy a home or land due to soaring prices. So, Don’t breed so fast to prove your ability due to social and cultural pressures, there are enough family planing methods and the house is nearly full, won’t stretch like a balloon.