brand logo

Manusha explains comments about foreign assistance being delayed by protests

28 Jul 2022

BY Safrah Fazal Samagi Jana Balawegaya (SJB) MP and Minister of Labour and Foreign Employment Manusha Nanayakkara alleged on Monday (25) that a staff-level agreement between Sri Lanka and the International Monetary Fund (IMF), which was set to be reached during the first week of August (next week), has been delayed due to the ongoing anti-President/Government protests and the chaotic situation in the country. The Morning reached out to Minister Nanayakkara on Tuesday (26) to obtain more clarity regarding the specifics of his statement.  The following are excerpts of the interview: You said that the staff-level agreement was due to be reached during the first week of August. Could you expand on the reasons for any delay in the process? Yes. What I said was that it was expected that the IMF staff-level agreement will be reached by the first week of August. But, with the situation of the country, until stability is reached, this will be delayed. The chaotic situation and the political instability in the country hindered this process. But didn’t President Ranil Wickremesinghe, who was then the Prime Minister, say earlier this month in Parliament that in order to reach a staff-level agreement, a debt restructuring plan needs to be submitted to the IMF? Yes. The debt restructuring process was put on hold because of this chaotic situation. Although I said that initially, the underlying story behind this is that the formulation of the debt restructuring plan which is to be submitted to the IMF was delayed by two weeks because of the country’s situation. With that, everything else was also delayed.  It was the President who said that we have to submit the debt restructuring plan and that a company was appointed for this task and that the needful was done. But all this was delayed. What happened was that on the one hand, the debt restructuring was delayed, and on the other hand, there was instability in the country. The IMF takes all this into consideration. The debt restructuring plan was supposed to be given in August. So, did the IMF confirm the staff-level agreement prior to this? No. The debt restructuring was delayed due to this chaotic situation in the country. If we had submitted it in time, we could have reached the staff-level agreement in August as that was what was expected. If the debt restructuring plan is pushed to mid- or late-August, the staff-level agreement will be pushed to September. So, the whole process got shifted. So does this mean that the IMF did not confirm a staff-level agreement in August? No. What I mean is that the President himself said earlier that we are expecting the IMF staff-level agreement by the first week of August. In order to reach it, we must submit our debt restructuring plan. With the situation in the country, debt restructuring was delayed and the IMF was also delayed. What happened to the country is that the benefits we could have received earlier were pushed back because of the unrest in the country. That’s what I meant. You mentioned that some benefits that we could have received were also delayed. Do you mean the IMF loan or opportunities for bridging finance? No. What I’m saying is that, through the IMF, we will receive bridging finance. With the IMF staff-level agreement, we can receive finance from other countries. We can get support from the Asian Development Bank and the World Bank. So, these will be delayed. The whole process is delayed. Have other countries confirmed any donations or loans? I don’t have information regarding that, but what I know is that Japan is sending or has already sent essential drugs to the country. China and India are helping out. The US is also supporting those in the small- and medium-sized enterprises (SMEs) sector. If there is stability within the country, we can receive assistance. But with the situation that is in the country, especially in the labour sector, people are migrating saying that they cannot stay in the country.  Most of those in the information technology (IT) sector are leaving the country. More than just individuals, entire firms in the IT sector are trying to leave the country. Factories are trying to shift to other countries after being pressured by their clients who are concerned that they won’t meet the supply and demand.  This chaotic situation is a big issue for the country. On the other hand, in the foreign employment market, some are trying to cut down on the number of Sri Lankans being recruited. They are trying to give the opportunity to those in Africa and other countries. When there is rebellion, they do not wish to take rebels into their countries. You also mentioned that some funds that were supposed to reach the country were delayed due to the situation. Could you elaborate? I met the Country Director of the World Food Programme (WFP). They are ready to aid the vulnerable communities in the country with meals. With the threat of malnutrition, they have arranged to provide food worth around $ 60 million, although I’m not certain of the exact amount. The WFP Head was supposed to arrive in the country on 23 July to finalise these, but that too was delayed due to the country’s situation.  It was the President or the Prime Minister who said that his arrival was delayed. However, I met with the local Country Director who was ready to get things going. But there was a delay there.


More News..