IMF bail out turns bleak in political turmoil and confidential file grab
Sri Lanka’s prospects of receiving the International Monetary (IMF) bail out package to avert the economic crisis became bleak with the intensifying of political instability and failure to reach a consensus on forming an all party government.
The country needs a head of state and cabinet of ministers headed by a prime minister capable of handling the local and international affairs while fulfilling the basic needs of the people and introducing social security networks for the poor and vulnerable community.
IMF and Sri Lanka have not reached understanding, on how to fulfill the key requirements for what could be a rapid financing instrument which would include policies to continue ensuring debt sustainability to address the balance of payment challenges including from the Covid 19 impact on tourism and to preserve international reserves,
Meanwhile Confidential files with important documents and reports relating recent discussions with the representatives of International Monetary Fund(IMF) and Sri Lankan authorities have gone missing from the Prime Minister’s Office following the invasion and take over of the building by protesters of the struggle.
All relevant reports and minutes of discussions between then Prime Minister Ranil Wickremasinghe and the IMF team of officials were kept under lock and key at the PM’s office for future reference due to its importance for obtaining bail out loans from the monetary agency , a spokesman of the PM’ s office said.
He added that these files with important documents have been misplaced during the period of forcibly occupation of invaders and protesters at the PM’s office who took over the office in a mass raid four days ago.
At the moment top-level talks with the IMF on a multibillion-dollar bailout has been stalled due to political impasse, a senior finance ministry official said.
.He said that the country urgently needs a political stability and stable administration to progress discussions with the IMF on key structural reforms, as well as to secure short-term bridge financing from other countries and multilateral agencies to help pay for key imports like fuel, pharmaceuticals and fertilizers.
It is last chance of getting donor agency support is now diminishing owing to the mishandling of public unrest in a humanitarian crisis as IMF’s assistance is linked to debt sustainability coupled with human rights , they added.
The economic downturn, dwindling foreign reserves and high inflation, political instability and countrywide public unrest have pushed Sri Lankan negotiators who sought US$ 4 billion assistance into a very weak position in their current talks .