Colombo: An International Monetary Fund (IMF) team met Sri Lanka’s president for talks on a bailout, including restructuring debt of about $29 billion, amid the nation’s worst financial crisis in more than seven decades. The second such visit in three months comes as the nation scrambles to lock down a staff-level pact for a possible $3 billion programme.
“It was further decided to hold another round of discussions, and to discuss technical issues with the officials of the Central Bank in the future,” the president’s office said. The main sticking point is how to find a sustainable track for Sri Lanka’s unwieldy debt, which stood at 114% of GDP at the end of last year.
Sri Lanka has $9. 6 billion in bilateral debt and its private credit, which includes international sovereign bonds, stands at $19. 8 billion, finance ministry data show. Japan and China are the largest holders of bilateral debt, with the latter accounting for about $3. 5 billion. Overall, when commercial debt is added, China holds about a fifth of Sri Lanka’s debt portfolio.
Facing flak over student arrests
Lanka announced that it will soon replace the controversial Prevention of Terrorism Act (PTA) with a new security law, a day after the US and the EU raised concern over Colombo’s use of the draconian counter-terrorism law to detain student activists. “PTA has been there since 1979. The justice minister informed the cabinet that a new National Security Act would be drafted by deleting the undesirable parts of the PTA,” cabinet spokesman and minister Bandula Gunawardena told reporters.
The three students of the Inter-University Students Federation have been detained since August 18 when it staged an anti-government demonstration. The Sri Lankan police began a probe into their possible links to an anti-government conspiracy and inciting violence and arson attacks across the country.
“Using laws that don’t conform with international human rights standards - like the PTA - erodes democracy in Sri Lanka. . . ,” US ambassador to Sri Lanka Julie Chung tweeted. The EU too voiced similar concern.
