Sri Lanka Crisis: Sri Lankan Prime Minister Mahinda Rajapaksa on Friday said he had a “very productive” conversation with his Chinese counterpart Li Keqiang and thanked him for assuring support to his government to address some of the crucial needs affecting peoples’ livelihoods and well-being, amidst the worst economic crisis in the island nation.
China has pledged “an urgent emergency humanitarian aid” of RMB 200 million [roughly $ 31 million] to Sri Lanka, even as Colombo pursues upto $4 billion support from the International Monetary Fund in Washington DC this week.
Sri Lanka’s Foreign Ministry said the Chinese assistance, being extended through the China International Development Cooperation Agency (CIDCA), includes 5,000 tonnes of rice, pharmaceuticals, production materials and other essentials. Further, China’s Yunnan Province has announced a donation of RMB 1.5 million worth of food packages to Sri Lanka, the Ministry said following a meeting between Foreign Minister G.L. Peiris and the Chinese Ambassador in Colombo on Thursday.
The development coincides with Colombo’s talks with the International Monetary Fund in Washington DC for a comprehensive package to help the island nation restructure its debt and revive its economy. The Sri Lankan government has pinned its hopes on IMF support, after announcing a default on its $51 billion foreign debt and raising interest rates in the lead up to negotiations with the Fund.
Sri Lankan Finance Minister Ali Sabry is currently in Washington DC and has met delegations of the IMF and the World Bank, US government officials, and Indian Finance Minister Nirmala Sitharaman, who is also in DC for the Spring meetings of the IMF and World Bank.
In March this year, the Chinese Ambassador in Colombo told a media conference that Sri Lanka had sought a new loan and buyer’s credit from China totalling $2.5 billion, apart from the $2.8 billion that Beijing extended to Colombo since the outbreak of the pandemic. Neither side has indicated if the latest $31 million emergency assistance from China is part of Colombo’s recent $ 2.5 billion request, that the Ambassador said was being “studied” by Beijing.
In the meantime, Colombo awaits good news from the IMF as its economic crisis aggravates. The Rajapaksa government is under considerable pressure, amid persisting street protests by citizens asking President Gotabaya Rajapaksa and Prime Minister Mahinda Rajapaksa to resign immediately.