Finance Minister Ali Sabry gestures during a briefing to Sri Lankan media via Zoom yesterday on the sidelines of his visit to Washington DC to participate in the ongoing IMF-World Bank spring meetings as well as discussions for support to Sri Lanka from international funding organisations and donor countries 

• Finance Minister confirms WB agrees for immediate bridging finance worth $ 300-600 m
• ADB extends $ 21 m for import of medicines 
• Says IMF opportunity a moment to seize to put economy on track
• Looking for Extended Fund Facility from IMF initially
• Says financial and legal advisers will be appointed within next 15 to 20 days for debt restructuring 
• Highlights Sri Lanka has external debt to the tune of $ 51 b
• Opines if revenue from current 8.76% of GDP is not increased to at least 14%, economic fall will be inevitable
• Lists stabilisation of rupee as biggest challenge whilst attracting foreign investments 
• Instructs Power and Energy Minister to appoint Task Force to tap into $ 2.4 b renewable energy projects of WB

By Charumini de Silva

Finance Minister Ali Sabry yesterday said the World Bank has agreed to provide ‘bridging finance’ of $ 300 to 600 million in the next four weeks to six months for Sri Lanka to ease off the economic crisis.

The medium-term bridging finance would be utilised for medicines, essential food, fertiliser and to provide financial relief to the most vulnerable people impacted by the worst economic crisis the country had ever encountered since independence.

“I am confident that Sri Lanka can overcome this economic crisis. Of course, it is going to be worse before it gets better,” the Finance Minister told Lankan media yesterday via  Zoom from Washington DC, on the side-lines of participating in the ongoing IMF-World Bankspring meetings and discussions for support from international lending agencies and donor countries.

“If we all work hard, be realistic and learn lessons from the past and other countries who went through such similar programs in 90s, Sri Lanka too can overcome this challenge. Although it is going to be painful couple of years, I think the IMF opportunity is a moment for us to seize irrespective of all differences,” Sabry added.He also said that they were in the process of appointing financial and legal advisers within the next 15 to 20 days, to unlock emergency funds needed to ease the worsening economic crisis and to restructure external debt amounting to the tune of $ 51 billion.

Noting that the discussions with the International Monetary Fund (IMF) had been centred around debt restructuring program along with a short, medium- and long-term strategy to overcome economic crisis, whilst explaining that Sri Lanka was not resorting Rapid Financing Instrument (RFI) but rather the Extended Fund Facility (EFF).

“Any release of funds from the IMF is preconditioned to the fact that debt needs to be sustainable. To be able to see light at the end of the tunnel, we need to discuss with our creditors. Right now, we are working overtime to negotiate with our creditors, but it all depends on how soon we can come into agreement with our creditors to get into a debt restructuring program,” he explained.

He also said ADB has agreed to extend $21 m for import of medicines.

Separately additional funding from India and China is also being finalised.

The Finance Minister said Sri Lanka currently receives just 8.76% revenue to the GDP, asserting it needs to be increased to at least 14% or the economic fall will be inevitable.

Sabry said during talks so far with multiple organisations and countries on the sidelines of the Spring meeting in Washington DC that the support to help Sri Lanka has been overwhelming.

Sabry listed out the stabilisation of the rupee as the single biggest challenge for Sri Lanka, whilst also attracting and accelerating the dollar investments into the economy.

Highlighting that there is a major demand for renewable power generating projects, he had already informed Power and Energy Minister Kanchana Wijesekera to appoint a Task Force to seize those investment opportunities.

“Some of these investments are coming in as grants. In addition, if we expedite the 17 such eco-friendly projects of the World Bank worth of $ 2.4 billion, it will come handy to draw the much-needed foreign currency,” he added.

The Minister also called on all citizens to send in their foreign exchange earnings via the formal banking system, to stabilise the rupee against the dollar. 

Admitting that the short-sighted policies implemented by successive Governments are reasonable for the current economic woes, he expressed hope it is still possible to overcome it.

“If we can come out of this crisis via structural reforms, which the country’s rulers had neglected for the past 74 years, it will be the true success of all Sri Lankans. I am confident we can triumph over this challenge, but we need the support of all political and public support during the next couple of years to ensure a sustainable future,” Sabry said.

Sabry to brief Parliament on 4 May on progress in talks with IMF