Ranil Wickremesinghe said that India's aid to Sri Lanka is not "charitable gifts"

22 Jun 2022 , 03:37 PM

Ranil Wickremesinghe, the prime minister of Sri Lanka, said to parliament on Wednesday (22-06-2022) that the financial aid given by India is not "charitable contributions" and that the island nation, which is going through a terrible economic crisis, had to have a strategy in place to pay back these loans. There is a severe lack of necessities including food, medication, cooking gas, and gasoline throughout the island country as a result of Sri Lanka's greatest economic crisis since gaining independence in 1948.

Under the Indian credit line, we have taken out loans totaling USD $4 billion. We have asked our Indian colleagues for more loan support. But even India won't be able to assist us in this way indefinitely. Even their help has its limitations. However, we must also have a strategy for paying back these debts.

In a report on the government's current mitigation efforts, Wickremesinghe informed Parliament that they are not charity gifts. A group of senior Reserve Bank of India (RBI) officials will visit Colombo on Thursday to evaluate the country's economic situation, he stated.

Beyond only having a lack of food, gasoline, gas, and power, according to Wickremesinghe, Sri Lanka is currently dealing with a far more catastrophic crisis. A total breakdown of our economy has occurred. The most important problem we have now is that. Only by rebuilding Sri Lanka's economy will these problems be overcome. He remarked that in order to accomplish this, we must first find a solution to the problem with our foreign reserves. He said that it is difficult to rebuild an entirely destroyed economy, let alone one with dangerously low foreign reserves.

He noted that for now, talking to the IMF is Sri Lanka's only surefire course of action. Actually, this is our only choice. This is the way we must go. Our goal is to have talks with the IMF and come to an agreement to get a new loan facility. The virtually insolvent nation, which had a severe foreign currency crisis that led to a default on foreign debt, said in April that it would postpone paying back about 7 billion USD of its around 25 billion USD in outstanding foreign debt till 2026. 51 billion USD are owed by Sri Lanka to its international creditors.

Since January of this year, the Indian credit lines have given Sri Lanka a lifeline amidst rising public discontent over the deteriorating economic conditions. The US Department of the Treasury will also send a team to Sri Lanka, according to Wickremesinghe, on Monday. By the end of July, we want to sign an official level agreement with the IMF.

A US bank, Hamilton Reserve Bank, reportedly started legal action against Sri Lanka for defaulting on a billion-dollar sovereign bond maturing the next month while Wickremesinghe was delivering his remark, according to a New York media story. The governing Rajapaksa clan, who are suspected of widespread corruption, was said to have organized the default.

The Rajapaksa family was accused of accumulating a multibillion-dollar wealth and concealing it in accounts in Dubai, Seychelles, and St. Martin.