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Uncertainties and impediments for obtaining international assistance
View(s):President Ranil Wickremesinghe has made a valiant effort to obtain international assistance so vital for the survival of the country and revival of the economy. He has assured the country that foreign assistance is near at hand.
Special message
In a special message to Parliament on October 6, President Wickremesinghe outlined the measures he had taken to obtain international assistance.
Fourfold strategy
The President unveiled a fourfold strategic plan to recover from the crisis. First, reaching a staff-level agreement with the International Monetary Fund (IMF); second, reaching a common agreement on debt restructuring with countries such as Japan, India and China and private creditors who have given loans; and third stabilising the economy by obtaining loan assistance from the IMF and other countries after certification from the IMF.
Towards development
He said he was “working to raise the country’s economy to a developed level through a general plan after stabilising the economy.”
First Step
Noting that the first step has already been successful, the President said: “The foundation is being laid to make the second step.”
Delay and uncertainty
However, there was a tardiness in obtaining such assistance, especially from the IMF, as certain conditions had to be fulfilled.
Although the Government had come to a staff level arrangement with the IMF to obtain an Extended Fund Facility (EFF), it was delayed as Sri Lanka must demonstrate its ability to ensure foreign debt sustainability. This had turned out to be a difficult task.
Assistance
The country is surviving through assistance from friendly countries and humanitarian aid from international organisations and agencies. However, there are indications that many countries, international organisations and the international community as a whole are reluctant to assist the country owing to the political instability and corruption of the Government.
International relations
Sri Lanka has had warm relations with many countries. We succeeded in being friends with all countries and foes with none.
Special relations
We had special relationships with India, China and Japan, a Commonwealth connection with Britain, Australia and New Zealand and a non-alignment bond with Afro-Asian countries.
This cordiality has been expressed frequently. The Indian and Chinese relationships are of special interest in this crisis. India has given substantial assistance with credit lines and gifts of food and medicines. It has pledged further assistance. At present, India is the country’s saviour providing us with essential fuel, food and medicines.
Japanese aid
Much was expected from Japan, which has been the main aid-donor for some time. Japan continues to be grateful for the role J.R. Jayawardene played at the San Francisco Peace Conference soon after the devastation of Japan in the Second World War.
San Francisco
J.R. Jayawardene changed the course of the San Francisco conference when he persuaded Western countries that won the war to not ask for reparations from Japan.
Gratitude
This earned the long-lasting gratitude of the Japanese, which has manifested itself in many ways. Japan has been the main source of aid and a development partner for Sri Lanka. The gift of the Sri Jayawardenapura Hospital is a substantial token of that gratitude.
China
Similarly, China is ever grateful for the United National Party (UNP) government of 1952 that defied the United States’ prohibition of trade with Communist China and signed a Rice-Rubber agreement that enabled China to procure rubber. The recent gift of rice in celebration of the 70th anniversary of this historic pact is a testimony of this gratitude.
BMICH
The outright gift of the massive Bandaranaike Memorial International Conference Hall (BMICH) is evidence of this continued cordiality among the two countries during Madam Sirimavo’s regime.
Strained relations
Then why is there a tardiness in obtaining assistance at this critical juncture? The previous government of President Gotabaya Rajapaksa offended the United States, Japan and India. So there were significant losses of foreign aid.
The previous Gotabaya Rajapaksa Government soured cordial relations with Japan. This Government cancelled the Japanese monorail project that was virtually a gift and would have significantly eased Colombo’s traffic congestion.
It also cancelled the agreement to hand over the construction of the Colombo Port’s Eastern Terminal to Japan and India—another project that would have benefitted the country’s external finances. With such violations of international agreements can one expect a quick favourable response to aid?
The United States
On the eve of the 2019 Presidential election, the Pohotuwa (SLPP) whipped up false fears that the US Millennium Corporation Project (MCC) would result in the division of the country. The abandonment of this MCC project resulted in a loss of US$ 477 million that was also a gift to the country.
Amends
Fortunately, President Wickremesinghe has made amends and these governments have pledged their support. However, they appear to have fresh concerns.
Human rights
There are new concerns. The recent repressive actions violating human rights has drawn the attention of the international community including some of our donors. The United Nations Human Rights Commission (UNHRC) resolution of September 5 is illustrative of this concern. Several foreign governments too have raised concerns about the violations of human rights and democratic freedoms.
Concluding reflections
All things considered, substantial foreign assistance is not imminent. The need to demonstrate foreign debt sustainability, violations of human rights and absence of good governance and corruption, are delaying the expected foreign assistance.
In spite of the reservoir of goodwill and friendship with many countries, and international humanitarian concern for the country’s plight, it is vital that we put our house in order to access the much needed foreign funding to revive the economy. The IMF condition of demonstrating foreign debt sustainability, undertaking fiscal and economic reforms and measures to reduce corruption are vital to obtain substantial international assistance.
The country will continue to receive humanitarian assistance from friendly countries and international agencies such as the UNICEF and the World Food Programme (WFP), to alleviate issues of poverty, malnutrition and hunger that are increasing among the people.
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