From Bog to Solid Ground

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US State Department, on its website on Thursday, said State Secretary Antony J. Blinken met Foreign Minister Ali Sabry in Phnom Penh, on the sidelines of the ASEAN Regional Forum and reiterated USA’s support for the people of Sri Lanka, highlighting over $179 million in US assistance that will support Sri Lanka’s most vulnerable and bolster the country’s economy in this challenging time.

 He also emphasised the importance of working with the IMF to put Sri Lanka back on the path to economic stability. As Sri Lanka approaches this juncture, the Secretary emphasised the need to act in accordance with the country’s constitutional processes and to protect all Sri Lankans’ human rights, including the right to peaceful assembly.

USA is Sri Lanka’s biggest merchandise export market and the country’s largest IT and IT enabled services (ITES) export market, Sri Lanka’s fourth largest foreign exchange earner last year.

But before inveigling the IMF, Sri Lanka has to first sort out its debt restructuring problems with China, its Achilles’ heel. China’s idea of debt restructuring is to give a new loan to repay the old loan, with the interest charged on the new loan being hazy.

However, of late, the Chinese appear to be changing this stance, ‘agreeing’ to work with international agencies to sort out Sri Lanka’s debt restructuring issue. President Ranil Wickremesinghe, in his policy speech on Wednesday, said that international consultants employed in the island’s debt restructuring process, together with the Government, are expected to put forward their proposal to the IMF this month, where discussions with the Fund will continue. 

But, IMF or no IMF, the problem is that the Wickremesinghe Government doesn’t exude the confidence of the likes of the USA to bail it out direct, unlike 44 years ago in 1978. In this connection, US President Jimmy Carter, in a letter written to President J. R. Jayewardene on 26 April 1978, said “Since 1975, the United States has increased its development assistance to Sri Lanka. From 1976 through 1979 we will provide more assistance to Sri Lanka than we did during the previous quarter century.

Our foreign assistance policies toward Sri Lanka direct our support primarily toward agricultural and rural development and the improvement of health and social infrastructure. US Ambassador to Sri Lanka Howard Wriggins will provide you with more detailed information on how our policies relate to your development goals.

We continue to be interested in assisting the important Mahaweli Ganga irrigation project. We are now providing assistance for part of its construction. We have had numerous discussions with your Government, the World Bank (WB) and other donor nations on the Mahaweli Ganga project and seek specific activities that would be consistent with our policies. We would like to be as forthcoming as possible in providing additional assistance. We await your Government’s plans and the results of the WB study on the proposed acceleration of this project.

The US seeks a mutually beneficial relationship with Sri Lanka that will enjoy the widest possible support from your people. I believe that we are making progress together and look forward to continued cooperation with you.”

It’s this chord of cooperation that Sri Lanka will have to once more strike with the USA after a 17-year hiatus if Wickremesinghe has any plans to pull the island out from the miry clay to which its leaders since 17 November 2005 have led it into, driven by greed and corruption, similar to the conditions that prevailed 45 years ago in 1977, which, then however was due to following wrong policies and not necessarily by greed and corruption alone.

If Sri Lanka had the gigantic, multibillion rupee Accelerated Mahaweli Development Project to offer to the likes of the USA then, it has so many underutilised  and wasteful State resources wracked by corruption to offer them now, further reinforced by strong regional and internal security, unlike in 1977. Yesterday, it was China, which got Sri Lanka mired in this political and socioeconomic bog. Let today be the USA, to pull it out from this miry clay. What Wickremesinghe needs is to be single minded, like Jayewardene.