Sri Lanka on Friday accused the IMF of politicizing financial aid following the fund’s delay in considering a US$1.9 billion bailout for the war-ravaged economy.
“Never ever has the IMF taken political factors into account. Now, it seems for the first time they are doing that — indirectly,” Sri Lankan Trade Minister G.L. Peiris told reporters in Washington ahead of talks with fund officials.
Sri Lanka tapped the IMF for aid in March in a bid to stave off its first balance of payment deficit in four years after the island’s foreign currency reserves fell to around six weeks’ worth of imports.
The loan has been put off amid political pressure from the US, Britain and other Western nations over Colombo’s handling of the final stages of a battle against Tamil separatists and charges that thousands of civilians were killed.
The Tamil Tigers were defeated last month.
Peiris said the IMF and Sri Lankan authorities had completed what he called “tactical discussions” over the US$1.9 billion standby facility as early as April, but that the fund’s board had still not met to consider the issue.
“So we think that it is wrong and, apart from the fact that it is unfair because Sri Lanka has to be helped in this situation, not obstructed, it is a very unsound and dangerous precedent for the future,” he said. “The IMF is now going to be embroiled in controversial political issues as part of the criteria governing their judgment in respect of particular transactions. That is very much our view.”
The IMF declined to comment on Peiris’ remarks.
The fund said on May 15 that it was at an “advanced stage” of discussions with Colombo on the bailout prospects and that it looked forward to having a program brought to the board for approval “in the coming weeks.”
The US, the main shareholder in the IMF and whose approval is key to the release of the money, has welcomed the end to the Sri Lankan fighting, but urged Colombo to meet the needs of 300,000 war displaced people who remain in temporary government shelters.
Washington has also supported calls for a probe into alleged war crimes committed by Sri Lankan government troops.
“We continue to press the Sri Lankan government to grant humanitarian relief organizations full access to the internally displaced persons who are now residing in the camps and to engage in political reconciliation with Sri Lanka’s Tamil minority,” Assistant US Secretary of State Robert Blake said.
“Overall access has improved, but more progress is needed,” he told a congressional hearing on Thursday.
Peiris said Colombo was not prepared to allow international non-governmental groups into the camps, saying the authorities had not completed “screening” the occupants. Fifty-two NGOs are scrambling for access to the camps.
The UN has also been at odds with the Sri Lankan government over its treatment of the displaced persons. Sri Lanka has arrested two UN employees, both ethnic Sri Lankan Tamils.
Human rights organizations claim Sri Lankan authorities have taken thousands of Tamils from the camps for the displaced.
Some rights campaigners compared the plight of the Tamils in the camps to that under Nazi Germany.
“This connotation of a Nazi concentration camp is a figment of their imagination. It is not true,” Peiris said.
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