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US breaking IMF promise; Lanka cannot survive on 30% tariffs, says Ranil
View(s):By Kapila Bandara
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ri Lanka should tell the Trump Administration that the United States is in breach of its IMF-related obligations to the island, in the context of wrestling with the high tariffs imposed, a former president suggested this week.
“Now you have to realise one thing. We have never told the US. US is a member of the OCC (official creditor committee) and US has signed on to the EFF (extended fund facility arrangement of the IMF) and their time limits, which means they must help us now. In that game. Otherwise they are in breach of the agreement,’’ said Ranil Wickremesinghe, former president. “They are preventing from us to repay the bondholders and we must now tell the bondholders to go to US and collect the money.’’
He also insisted that Sri Lanka “can’t survive with 30% (tariffs)’’.
Speaking at a launch of a book on ‘Policy Challenges of Globalisation in Sri Lanka,’ he was likely referring to the statement that the then United States Treasury Secretary Janet Yellen made on March 6 2023, expressing support for “Sri Lanka’s steps towards an IMF-supported program to advance economic reform and achieve a strong and durable recovery’’. Ms Yellen also reminded Sri Lanka of “commitments to transparency and comparable treatment for all bilateral official and private creditors’’.
“Just going and saying we’ll buy Coca Cola from you or we’ll buy gas from you. Okay you’re in breach of this,’’ he said, dismissively referring to negotiations now ongoing.
But bilateral trade with the United States is a matter separate from the IMF’s macroeconomic lifeline for a broken country.
After announcing a reduction in US tariffs to 30%, Deputy Minister of Economic Development Dr Anil Jayantha Fernando said this week the United States has agreed to import 70% to 80% of goods — 1,161 products including apparel and 42 agricultural goods — tariff free from Sri Lanka. He did not elaborate.
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