Sri Lankan economic crisis: President Rajapaksa seeks support from India, China, Middle East

Prime Minister Ranil Wickremesinghe has announced that extended credit lines from India are being sought until the availability of the IMF facility.

Published: 09th June 2022 05:30 PM  |   Last Updated: 09th June 2022 05:30 PM   |  A+A-

Sri Lankan President Gotabaya Rajapaksa with ambassadors and High Commissioners of India, China and Middle East. (Photo | Twitter)


COLOMBO: Sri Lankan President Gotabaya Rajapaksa on Friday sought all possible assistance from India, China and the countries in the Middle East when he met the high commissioners and ambassadors amidst the unprecedented economic crisis faced by the island nation.

"Had a productive meeting with Amb and HC's of the #MiddleEast, #China & #India this morning. I requested their assistance in resolving the existing crisis, while briefing them on the current economic, social and political situation of #lka & appreciate their positive response," President Rajapaksa tweeted.

The president also appreciated the assistance already provided by these countries to Sri Lanka which has been grappling with unprecedented economic turmoil since its independence from Britain in 1948.

Sri Lanka's economic crisis has created political unrest with protesters demanding President Rajapaksa's resignation.

"President Rajapaksa requested the diplomats to extend all possible assistance for Sri Lanka in resolving the existing situation. He also expressed his appreciation of the assistance provided by those countries so far," according to a statement issued by the President's office.

In keeping with India's 'Neighbourhood First' policy, New Delhi has extended this year alone support worth over USD 3.5 billion to the people of Sri Lanka for helping them overcome their current difficulties.

India has rushed assistance in the form of line credit and other modes to help Sri Lanka which has virtually declared insolvency and defaulted on all foreign loans including that of China totalling USD 51 billion.

China has announced an assistance of 500 million RMB (about USD 74 million) for the supply of essential goods but remained silent about President Rajapaksa's request to defer the loan repayment and as well as its earlier announcement to consider a USD 2.5 billion loan facility for Colombo.

An IMF bailout programme is being currently worked out and expected to be available in the last quarter of the year.

Prime Minister Ranil Wickremesinghe has announced that extended credit lines from India are being sought until the availability of the IMF facility.

In a rare gesture, China on Wednesday commended India's efforts to assist Sri Lanka to deal with its worst financial crisis but refuted the island nation's President Gotabaya Rajapaksa's remarks that Beijing has shifted its strategic focus from South Asia, including Pakistan, to South East Asia, saying the region still remained its priority.

India has extended an additional USD 500 million credit line to Sri Lanka to help the neighbouring country import fuel as it has been struggling to pay for imports after its foreign exchange reserves plummeted sharply in recent times, causing a devaluation of its currency and spiralling inflation.

With the economic crisis and the shortage of Forex, the Indian credit line of USD 500 million for fuel imports has provided a lifeline to the island nation, which is currently experiencing its worst economic crisis since gaining independence in 1948.

A total of close to 4,00,000 MT of various types of fuel have been delivered with Indian assistance in March and April.


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