IMF bailout: Cabinet likely to decide tomorrow

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A decision on whether to seek a bailout from the International Monetary Fund (IMF) is likely to be taken at tomorrow’s Cabinet meeting, according to two ministers.

Central Bank (CB) Governor Ajith Nivard Cabraal and Treasury Secretary S.R. Attygalle have been asked to brief the Cabinet tomorrow on the country’s financial situation and foreign reserve position.

Finance Minister Basil Rajapaksa, who returned to the country yesterday from a private visit to the US is due to attend tomorrow’s Cabinet meeting. The subject of whether to seek IMF assistance is expected to be on the agenda at tomorrow’s meeting.

Mr Cabraal has remained adamant that Sri Lanka does not need to seek IMF assistance to come out of its crippling economic crisis. In doing so, he has also waded into a debate taking place inside closed doors of the Cabinet and publicly among Government Ministers on whether the country should go to the IMF.

While the CB Governor may paint a rosy picture of the country’s finances, the ground situation is that the prices are sky high, Wildlife and Forest Conservation Minister C.B. Rathnayake told the Sunday Times. “We have to pay off billions of dollars in debt this year while also having to contend with meeting the demands of various state sector unions. This is not an easy task.”

Mr Rathnayake said he personally believed there was no option now but to seek IMF assistance. “That doesn’t mean we adhere to all the conditions the IMP intends to impose on us, but we should at least open a dialogue. Simply dismissing the IMF and insisting we are capable of riding this out will not help the people.”

While the Cabinet remains divided over seeking IMF assistance, the minister claimed he believed a majority of Cabinet Ministers were now supportive of going to the IMF.

Environment Minister Mahinda Amaraweera said he also believed the Government had to go to the IMF since there was no option left. Mr Amaraweera, is one of two ministers in the Cabinet representing the Sri Lanka Freedom Party (SLFP), with Labour Minister Nimal Siripala De Silva being the other.

Several other Cabinet Ministers, such as Trade Minister Bandula Gunawardena and Water Supply Minister Vasudewa Nanayakkara have spoken out publicly against going to the IMF.

(Source: The Sunday Times – By Sandun Jayawardana)

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