Tuesday, August 9, 2022

US officials arrive in Sri Lanka to address unprecedented economic crisis

COLOMBO, Sri Lanka ( Associated Press) – Senior US officials arrived in Sri Lanka on Sunday to find ways to help the island nation in the wake of an unprecedented economic crisis and severe shortages of essential supplies, as the energy minister warned that new fuel shipments will be delayed.

The US has announced millions of dollars in aid over the past two weeks to Sri Lanka, which has survived on $ 4 billion in credit lines from neighboring India. It also received $ 300 million to $ 600 million pledges from the World Bank to buy medicines and other items.

Prime Minister Ranil Wickremesinghe announced last week that the economy had “collapsed” due to dwindling foreign exchange reserves and a growing debt, exacerbated by the pandemic and other long-term problems.

The U.S. delegation was led by Robert Kaproth, Deputy Assistant Secretary of the Treasury for Asia, and Kelly Keiderling, Deputy Assistant Secretary of State for South and Central Asia.

READ MORE: Sri Lanka’s prime minister says economy ‘completely collapsed’

During their four-day stay, they will meet with a wide range of political representatives, economists and international organizations to “explore the most effective ways for the US to support Sri Lankans in need, Sri Lankans working to resolve the current economic crisis” loose, and Sri Lankan plans for a sustainable and inclusive economy for the future, ”the US embassy said in a statement.

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“This visit underscores our continued commitment to the security and prosperity of the Sri Lankan people,” said Julie Chung, US Ambassador to Sri Lanka.

She said that while Sri Lankans had endured some of the “greatest economic challenges in their history, our efforts to support economic growth and strengthen democratic institutions have never been more critical.”

The US has announced $ 120 million in new funding for small and medium-sized businesses, a $ 27 million contribution to Sri Lanka’s dairy industry and $ 5.75 million in humanitarian aid to help those hardest hit by the economic crisis. Another $ 6 million is dedicated to new livelihood grants and technical assistance for financial reform.

READ MORE: Sri Lankan president announces state of emergency ahead of new protests

Sri Lanka says it is unable to repay $ 7 billion in foreign debt owed this year, pending the outcome of negotiations with the International Monetary Fund over a bailout package. It should pay an average of $ 5 billion annually until 2026. Authorities have asked the IMF to hold a conference to unite Sri Lanka’s borrowers.

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Kanchana Wijesekera, Minister of Power and Energy, in a tweet on Saturday night urged people not to stand in line for fuel, saying new shipments would be delayed due to “banking and logistical reasons.”

He said limited supplies of fuel will be distributed to limited stations next week. He said until the next shipments arrive, “public transport, power plants and industries will be a priority.”

Wickremesinghe said last week that the state-owned Ceylon Petroleum Corporation owed $ 700 million and as a result no country or organization was willing to supply fuel.

Protesters have been occupying the entrance to President Gotabaya Rajapaksa’s office for more than two months, demanding his resignation, saying the primary responsibility for the crisis lies with him and his family, who accuse them of corruption and mismanagement.

Nation World News Desk
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