Facebook icon
Twitter icon
e-mail icon

A 'great comeback' for Sri Lanka claims senior US diplomat, as economic woes continue

(Screengrab of the event where Donald Lu made these remarks about Sri Lanka)

At a time when consumer confidence is at its lowest in Sri Lanka since receiving a bailout from the International Monetary Fund (IMF), Donald Lu Assistant Secretary of State for South and Central Asian Affairs claimed that "Sri Lanka was a great come back story".

“If you will go back with me in time, you will remember, a country in crisis," said the senior US diplomat. "You will remember mass riots in the streets, lines for petrol, and food snaking around the corners, the seizure of the president's home and protestors swimming in his swimming pool,” he added, referring to the mass Aragalaya protests, which dominated the South. “It is a very different place, the country is stable, food and fuel crisis are stable, they’ve gotten reassurance on their debt restructuring, and the IMF money is gone. How did they do that?”

Lu further asserted that it was thanks to the assistance of countries like India and the US, that Sri Lanka has managed this apparent recovery. 

“We saw countries like India coming forward with concessional loans, so Sri Lanka can continue bringing in vital supplies, food, and fuel. USAID on the same days provided hundreds of millions of dollars in agricultural inputs, fertilizer, and seeds so farmers can grow their crops. On the debt side, Sri Lanka has a heavy debt burden. The creditor committee led by Japan, France, and India negotiated to find a formula to allow Sri Lanka to restructure its debt in a sustainable way, they put pressure on the Chinese and it opened up IMF funding.”

The statement comes however as private creditors have complained that no "substantive engagements" have occurred and that there is a "lack of transparency" with government creditors. In January, consumer confidence in Sri Lanka also reached its lowest levels since entering the International Monetary Fund (IMF) program according to a survey by the Institute for Health Policy (IHP). 

The Index of Consumer Expectations (ICE), which tracks future perceptions, decreased by 5 points to 21 points, while the Index of Current Conditions (ICC), a measure of perceptions of current conditions, also decreased by 5 points to 10 points, the IHP said. Consumer confidence has been falling for nine months since it recovered after the announcement of the March 2023 IMF EFF agreement. Levels are now back to where they were before the IMF EFF, the IHP said in its full report.

Lu also claimed that what “Sri Lanka needs now is for all of us to be there to support its sovereignty". The statement comes as there is significant concern over Sri Lanka's human rights record and a potential impeding crackdown of activists with the passage of the Online Saftey Act. Lu has previously claimed, in a meeting with the Tamil National Alliance, that the "human rights are central to US foreign policy in Sri Lanka" however there has been discomfort over the US's willingness to cast a blind eye to Sri Lankan abuses. 

When Ranil Wickremesinghe was appointed President, Lu reportedly told Wickremesinghe "You’re the right man to do this... I hope you can feel that you have [our] full support.”

In response to Lu's endorsement of Sri Lanka's economic recovery, Wickremesinghe took to X (formerly Twitter) to thank Lu. 

“Our progress has gained global recognition," Wickremesinghe tweeted.

We need your support

Sri Lanka is one of the most dangerous places in the world to be a journalist. Tamil journalists are particularly at threat, with at least 41 media workers known to have been killed by the Sri Lankan state or its paramilitaries during and after the armed conflict.

Despite the risks, our team on the ground remain committed to providing detailed and accurate reporting of developments in the Tamil homeland, across the island and around the world, as well as providing expert analysis and insight from the Tamil point of view

We need your support in keeping our journalism going. Support our work today.

For more ways to donate visit https://donate.tamilguardian.com.