As part of a bailout program, the International Monetary Fund has stated that it will provide Sri Lanka with financial assistance while also evaluating the country’s governance. Sri Lanka is the first Asian nation to undergo a corruption investigation as part of a bailout program.
Sri Lanka will receive $3 billion (£2.44 billion) as part of a bailout scheme to assist the bankrupt and humanitarian crisis-stricken nation.
The executive board of the International Monetary Fund (IMF) will promptly provide the country with $333 million (£272 million) to assist it in reducing its debt to sustainable levels.
Living costs, power prices, and high-income taxes are squeezing millions of Sri Lankans. However, IMF funding will not instantaneously assist these individuals.
According to a survey published this month by Save the Children, half of Sri Lanka’s families have been forced to reduce the amount of food they feed their children.
At the beginning of last year, economic mismanagement and the impact of the COVID pandemic left Sri Lanka severely short of dollars for essential imports, plunging the island nation into its worst financial crisis in seven decades.
President Ranil Wickremesinghe’s office said the scheme would provide $7 billion in funding.
“The world no longer considers Sri Lanka bankrupt,” he said in a video statement.
“As our foreign currency strengthens, we’ll gradually ease import restrictions.” “In the first cycle, we will import essential goods, medicines, and goods required by the tourism industry,” said Mr. Wickremesinghe, adding that he anticipates tabling the agreement with the IMF in parliament on Wednesday after delivering a detailed statement.
In the first instance of an Asian country being investigated for corruption as part of a bailout program, the IMF has stated that it is assessing Sri Lanka’s governance.
The senior mission director for the IMF in Sri Lanka stated that the development lender was “conducting a comprehensive governance diagnostic exercise that will assess corruption and governance vulnerabilities in Sri Lanka and provide prioritized and sequenced recommendations.”
Sri Lanka will be the first Asian country to endure an IMF governance diagnostic exercise. Peter Breuer told reporters: “We look forward to further engagement and collaboration with stakeholders and civil society organizations on this critical reform area.”
Since last year, Sri Lankans have taken to the streets demanding accountability for alleged corruption. And the return of assets allegedly misappropriated by former ruling family members.
Since Mr. Wickremesinghe succeeded ex-President Gotobaya Rajapaksa, he has reduced product shortages and ended daily power outages lasting several hours.
According to the central bank, its reserves have increased and the black market no longer regulates the foreign exchange market.
However, Mr. Wickremesinghe’s detractors accuse him of protecting the Rajapaksa family, which still controls the majority of parliamentarians, in exchange for their support of his presidency.
