Monday, 13 May, 2024

Cash-strapped Sri Lanka gets World Bank help, awaits IMF decision



Also, the Sri Lankan government will sell long-term visas to attract foreign currency after the island nation ran out of dollars to pay even for food and fuel in the wake of a crippling economic crisis.

Sri Lanka's economic collapse has triggered widespread street protests demanding President Gotabaya Rajapaksa's resignation.
Sri Lanka’s economic collapse has triggered widespread street protests demanding President Gotabaya Rajapaksa’s resignation. (AFP)

The World Bank has agreed to provide Sri Lanka with $600 million in financial assistance to help meet payment requirements for essential imports.

The World Bank would release $400 million from the package "shortly", the Sri Lankan president's media division said in a statement on Tuesday.

According to the statement, the World Bank said it would continue to help cash-strapped Sri Lanka to overcome the current economic crisis.

Sri Lanka has kicked off talks with the International Monetary Fund (IMF) for assistance. Before the IMF finalises a programme, the country needs $3-$4 billion in bridge financing to help meet its essential expenses.

Sri Lanka has also appealed to multiple countries and multilateral organisations for bridge financing until the IMF comes up with its aid. Colombo would also seek the Asian Development Bank's assistance.

READ MORE:Key aides turn against Sri Lanka PM as street protest pressure mounts

Long-term visa programme

As the country looks to shore up its finances, the government said on Tuesday it will sell long-term visas to attract foreign currency after the island nation ran out of dollars to pay even for food and fuel.

Foreigners who deposit a minimum of $100,000 locally will be granted permission to live and work in Sri Lanka for 10 years under the "Golden Paradise Visa Programme", the government said.

But any income from the scheme is likely to be dwarfed by the scale of the current crisis, with acute shortages of food, fuel and medicines that have triggered widespread protests.

Under the programme, the money payable will need to be deposited in a local bank account for the duration of the visa, the government said in a statement.

"This scheme will help Sri Lanka at a time when we are facing the worst financial crisis since our independence," media minister Nalaka Godahewa told reporters in Colombo.

The government also approved the granting of five-year visas to any foreigner spending a minimum of $75,000 to buy an apartment on the island.

Separately, the government said it was ready to consider political reforms, including constitutional amendments that could reduce the authority of the president.

Meanwhile, thousands of people remained camped outside President Rajapaksa's seafront office to demand his resignation.

Fuel prices have almost doubled since December, and the government announced on Tuesday an 81 percent increase in the price of cooking gas. Cement, soap and detergents went up on Monday by between 17 and 100 percent.

The latest price increases came as the main opposition launched a six-day protest march from the central city of Kandy to the capital, a distance of 115 kilometres (72 miles).

READ MORE:Sri Lanka to conduct probe after death at anti-government protest

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