Sri Lanka set to begin talks with IMF as economic crisis worsens

Long queues stretching for kilometers of exhausted drivers who have been waiting for hours for petrol have become a common sight in Sri Lanka as it deals with the worst economic crisis in seven decades.

Tuk tuk driver Mohamed Rahuman has been in standing in line since Friday (June 17) evening and he reckons, even if petrol becomes available on Saturday (June 18) he won’t be able to work as he will be too tired.

Life is becoming difficult not just for people like Rahuman, but for most of the country due to the lack of fuel and soaring prices from the financial turmoil.

An International Monetary Fund (IMF) delegation is due to arrive in Sri Lanka on Monday (June 20) as the country looks for a loan program from the lender to deal with the crisis.

The team will hold talks with government officials in a bid to finalise a bailout agreement during their 10-day visit but the IMF won’t solve problems immediately, experts warn.

The IMF programme will provide access to other financing options. That would be the main way that we would get any help. But the IMF has already said they are mainly considering the debt restructuring process to provide the assistance.

So, the talks with be starting next week. But in my view it will be a slightly slow process for us to get IMF money, says Dhananath Fernando of think thank Advocata Institute.

Sri Lanka is scrambling to find a foreign exchange to pay for desperately needed fuel imports, and its existing stock of petrol and diesel is projected to run out in a matter of days. On Friday (June 17) the island nation ordered public sector employees to work from home for two weeks due to the fuel shortage after earlier in the week approving a four-day work week for public sector workers.

As many as 5 million Sri Lankans could be directly impacted by food shortages in the coming months, Prime Minister Ranil Wickremesinghe’s office said in a statement on Friday.

The United Nations has outlined a plan to raise $47 million to provide assistance to 1.7 million Sri Lankans worst hit by the crisis over the next four months.