4 months ago
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Sri Lanka volition property up with the ongoing International Monetary Fund (IMF) programme — criticised by sections for imposing achy austerity connected mean radical — contempt the devastation caused by Cyclone Ditwah that struck the land federation successful late November 2025.
Following President Anura Kumara Dissanayake’s gathering with a visiting IMF delegation earlier this week, his bureau said that the Fund pointed to Sri Lanka moving “in the close economical absorption contempt facing a terrible catastrophe situation” and stated that determination would beryllium “no changes to the agreement”, connected the Extended Fund Facility (EFF) programme.
Cyclone Ditwah is the worst clime daze lawsuit the land has witnessed since the Indian Ocean tsunami of 2004. The torrential rains, grounds flooding, and aggregate landslides person claimed astatine slightest 649 lives until now, portion arsenic galore arsenic 173 persons stay missing for 2 months. With immense losses to nationalist infrastructure, homes, and livelihoods, the devastation is wide seen arsenic a immense setback for a state getting retired of a sedate economical situation that spiralled successful 2022.
Also work | Cyclone Ditwah harm successful Sri Lanka | The agelong way from wreckage to recovery
Early that year, then-President Gotabaya Rajapaksa sought the IMF’s assistance to header with a superior equilibrium of payments problem, arsenic his authorities ran retired of dollars to import indispensable items, including nutrient grains. Forced to contend with agelong powerfulness cuts, nutrient and medicine shortages, citizens took to the streets demanding that Mr. Gotabaya discontinue office. In April that year, his authorities announced Sri Lanka’s archetypal sovereign default. In March 2023, the IMF approved $2.9 billion for Sri Lanka, past helmed by President Ranil Wickremesinghe, who replaced Mr. Gotabaya aft citizens unseated him.
President Dissanayake, who was elected to bureau successful September 2024, promised not to derail the IMF programme aimed astatine achieving macroeconomic stability, adjacent arsenic immoderate successful Sri Lanka flagged crushing austerity measures linked to the programme, including a drastic driblet successful worth of mean people’s pension funds, taxation hikes, emergence successful substance and energy prices, and a precocious outgo of surviving that persists arsenic a consequence.
In the aftermath of the cyclone, over 70 civilian nine groups and activists crossed Sri Lanka called for the renegotiation of the IMF deal, accusing the Dissanayake authorities of becoming a “prisoner” of the ongoing IMF programme. “The IMF controlling authorities spending not lone restricts the quality of the authorities to respond to the ongoing humanitarian crisis, but severely impedes concern successful infrastructure, recuperating livelihoods, and adapting to further clime alteration impacts,” they contended. A radical of globally renowned economists, including Nobel laureate Joseph Stiglitz, echoed this request and called for a halt to Sri Lanka’s indebtedness repayments.
In his caller enactment with the Fund’s representatives, President Dissanayake noted that the catastrophe had astir severely affected mediocre agrarian communities, with agrarian infrastructure and livelihoods suffering extended damage. A full of LKR 500 cardinal had been allocated to support agrarian livelihoods and reconstruct income-generating activities, helium further told them, emphasising that this measurement did not “in anyhow signify a departure from due fiscal absorption oregon fiscal responsibility.” Both the IMF and the Sri Lankan authorities agreed to proceed implementing the Extended Fund Facility programme without making immoderate changes to the existing agreement, the connection issued by the Presidential Media Division said.
Meanwhile, pursuing a petition from Colombo, the IMF’s Executive Board besides approved astir $200 cardinal nether its Rapid Financing Instrument (RFI) installation to “help code urgent balance-of-payments and fiscal pressures” arising from the catastrophic Cyclone Ditwah.
