After the International Monetary Fund (IMF) approved a 48-month extended arrangement under the Extended Fund Facility of USD 3 billion to support Sri Lanka’s economic policies and reforms, there are talks that the deal between President Ranil Wickremesinghe and IMF may make room for pro-China forces to raise their head in the island nation, reported Mawrata News. Upul Joseph Fernando, writing in Mawrata News said that the IMF-Ranil deal is an ideal opportunity for the pro-Chinese communal forces to raise their head once again.
The majority of Sri Lankans believe that Ranil’s government is protecting a corrupt regime. Sri Lankans despised the IMF in 2002 and 2015 -2019 because of Ranil’s government’s efforts to implement IMF conditions. Because Ranil arrogantly implemented IMF conditions in 2004 and 2019, anti-IMF, pro-communal Chinese forces rose up, reported Mawrata News.
Mandate-less Ranil obtained an IMF loan because America, India, and Japan were concerned that a bankrupt Sri Lanka would seek Chinese assistance, said Fernando. During the ‘Aragalaya’ period, there was a widespread anti-China sentiment, and the IMF gained popularity. Because of Ranil’s IMF deal, there is a chance that anti-IMF sentiment will resurface.
Aragalaya is a Sinhalese word for “struggle” and was used widely to describe the daily gathering of people at Colombo that began with the demand that Gotabaya resigns as President and make way for a new dispensation, even “a new system”. In its essential meaning, aragalaya also captures the struggle of individual Sri Lankans to find food, fuel and medicines on a daily basis, bringing them all together in a “janatha aragalaya” — a people’s struggle.
It has been mostly leaderless, though some individuals have spoken for the group on occasion. All opposition parties, civil societies, and religious leaders said that even if a staff-level agreement was reached in order to obtain IMF board approval a government with a mandate is needed. The opposition believes the government currently lacks a mandate, reported Mawrata News.
Even after Gotabhaya left and Ranil became president, the opposition, civil organisations, and religious leaders in Sri Lanka expressed their opinion that a new government must be formed through a general election in order to reach an agreement with the IMF. However, Ranil disregarded public opinion and signed a staff-level agreement. Sri Lanka has been facing a severe economic crisis as a result of past policy missteps and economic shocks.
IMF said it is now important for the Sri Lankan authorities and creditors to closely coordinate and make swift progress towards a debt treatment that restores debt sustainability under the IMF’s Extended Fund Facility-supported program. IMF further said it is now essential for Sri Lanka to continue the reform momentum by the authorities and the Sri Lankan people more broadly.
According to IMF, Sri Lanka’s public debt, at 128 per cent of GDP as of end-2022, is unsustainable.