Sri Lanka will not see a bailout from the International Monetary Fund (IMF) until it emerges from its current political chaos according to a Professor of Political Economy at Johns Hopkins University.
Professor Deborah Brautigam told CNBC that “the IMF cannot… interact with the government when things are in a continuing crisis mode.” She continues “until the government stabilizes, until they have a Minister of Finance, there’s no one for the IMF to talk with.”
Sri Lanka has seen a wave of civil unrest in response to an economic crisis that has ravaged the island. The uprisings have resulted in the resignation and fleeing of former President Gotabaya Rajapaksa.
Legislators have since elected Ranil Wickremesinghe as President. Wickremesinghe has so far declared a state of emergency and used armed forces to raid a protest camp. The raid left over 50 people injured.
The instability on the island undermines the prospect of an IMF bailout. Brautigam highlights that “the IMF will not lend into a situation where they deem their money will not be repaid.” Brautigam added that “if Sri Lanka cannot provide assurances, there will be nothing forthcoming from the IMF.”
According to the Johns Hopkins Professor, Sri Lanka will not be able to provide what is necessary “as long as the crisis is ongoing”.
The economic crisis has left the island with extreme shortages of food, fuel, and medicine. The United Nations has estimated that 5.7 million people require “immediate life-saving assistance.”
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