India to help Sri Lanka salvage country from economic downturn
A friend in need is a friend indeed is a conceptual phrase used the world over to describe the gratitude of someone towards the beneficial deeds of another. During these trying times, Sri Lanka was looking high and dry for help they much needed economically.
India, an economic giant of the region, proved this dictum in deed more than the word, putting an action plan in place that would ease the financial burden heaped on the country. India volunteered to help Sri Lanka to salvage the country from an economic downturn that the country was facing, owing to monumental blunders by the successive government.
 Nirmala Sitharaman |
 Milinda Moragaoda |
The neighborhood first policy of India crafted with a sense of decorum helped Sri Lanka enormously to overcome to a greater degree the palpable disgust of the public against the government. The neighborhood first policy of India is a core foreign policy component of the government of Prime Minister Narenda Modi.
It focuses on peaceful relations and collaborative synergistic co-development with its South Asian neighbors of the Indian subcontinent encompassing a diverse range of topics, such as economics, technology, research and education, and connectivity according to its definition. Proving the definition and its underlying meaning to the very letter, India, the closest neighbor of Sri Lanka, extended its hand of friendship to Sri Lanka in numerous ways.
The impromptu and voluntary gesture of the Indian government in helping a struggling neighbor is a welcome move. The Neighborhood first policy adopted by India is to help the neighbors in need. It served Sri Lanka well under the circumstances and has taken precedence over any other matter in this endeavor.
India, without any reservation, has gone to the extent of talking to the International Monetary Fund (IMF), signaling the urgency of granting an RFI (Rapid Financing Instrument) to overcome the financial crisis the country is facing.
Indian Finance Minister Smt. Nirmala Sitharaman has had a lengthy discussion with the Sri Lankan High Commissioner in Delhi, Milinda Moragaoda, on the current economic situation of Sri Lanka was quite encouraging. The indications were that India had no hidden agendas in helping Sri Lanka to come out of this critical economic downturn.
Sri Lanka High Commissioner to India, Milinda Moragoda, met with the Finance and Corporate Affairs Minister of India Smt. Nirmala Sitharaman is in New Delhi on April 13 to review the present status of Indo-Lanka economic cooperation as Sri Lanka was planning to enter negotiations with the IMF for an economic adjustment programme.
High Commissioner Moragoda expressed his gratitude to the Indian Finance Minister for the assistance that India was extending to Sri Lanka as a credit line for the supply of essential commodities and fuel and for the balance of payment support extended when the country was facing challenging times.
Both Minister Sitharaman and High Commissioner Moragoda opined that this assistance could form part of bridging the finance required by Sri Lanka until the intervention of the IMF to devise an economic adjustment programme for Sri Lanka.
India became the first country to support Sri Lanka financially to bridge the gap with the anticipation that an IMF programme would be in place sooner than later.
In this context, High Commissioner Moragoda and Minister Sitharaman also discussed how India could assist Sri Lanka in garnering international support to secure much-needed finances and for the economic adjustment programme itself, by engaging bilateral and multilateral partners.
The High Commissioner briefed the Minister on the debt moratorium announced by the Government of Sri Lanka and informed the Indian Minister that the Sri Lankan authorities are seeking a consensual agreement on debt restructuring.
Enhancing and restructuring the assistance provided by India was also a subject of discussion between the Minister and the High Commissioner. Indian Minister of Finance and the High Commissioner also discussed ways and means to achieve these objectives by introducing financial instruments such as credit lines to purchase essential commodities and fuel and the balance of payment support.
The discussion on how India could play an expanded role in promoting accelerated growth and development in Sri Lanka in the medium term received the attention of both the Minister and the High Commissioner.
High Commissioner Moragoda and Minister Sitharaman reviewed and expressed satisfaction over the ongoing official-level discussions between Sri Lanka and India to establish a cooperation framework and to monitor the progress of economic cooperation between the two countries in the present context.
The Presidential Advisory Group on Multilateral Engagement and Debt Sustainability, the Governor of the Central Bank and the senior officials from the Treasury are engaged in these discussions representing Sri Lanka. Officials from India are the Chief Economic Advisor of the Government and the Secretary (Economic Affairs) of the Ministry of Finance. The respective High Commissions of the two countries in Delhi and Colombo are also a part of these discussions.
During the meeting, the Finance Minister of India expressed her concern over the humanitarian cost of the economic crisis and said that India would stand by Sri Lanka to overcome its challenges.
In response, High Commissioner Moragoda thanked Minister Sitharaman profusely for the personal interest that she has taken in supporting Sri Lanka at this difficult time.
They also noted that Finance Minister of Sri Lanka Ali Sabry and his delegation would be meeting the Ministerial delegation from India next week in Washington D.C. on the sidelines of the IMF spring meetings.
IMF Managing Director assures immediate help to Sri Lanka
IMF Managing Director told Indian Finance Minister IMF would continue to actively engage with Sri Lanka during a meeting with the latter
Managing Director of the IMF Kristalina Georgieva assured Indian Finance Minister Nirmala Sitharaman that the IMF would actively engage with Sri Lanka.
Indian Finance Minister Smt. Nirmala Sitharaman met with IMF Managing Director Kristalina Georgieva in Washington D.C for bilateral talks. During the ensuing discussion, Georgieva brought reference to the help India is providing Sri Lanka during their difficult times.
Smt. Sitharaman indicated that IMF should support and urgently provide financial assistance to Sri Lanka. The IMF Managing Director assured the Finance Minister that the IMF would continue engagements with Sri Lanka. Georgieva highlighted the resilience of the Indian economy, which remains the fastest-growing country across the globe despite challenges posed by the COVID-19 pandemic.
Georgieva also referred to a well-targeted functional policy mix followed by the Indian government. The Managing Director of the IMF lauded India for its contribution to the capacity development activities of the IMF.
Georgieva praised the vaccination programme and the help extended to its neighbour and other vulnerable economies.