NEW DELHI: Sri Lanka 's new president on Wednesday called for resuming discussions “immediately” over a $2.9 billion IMF bailout that provided a lifeline to his bankrupt country though it was accompanied with painful austerity measures.
Last week, self-avowed Marxist Anura Kumara Dissanayake achieved a landslide victory with promises to reverse steep tax hikes, raise public servant salaries and renegotiate the International Monetary Fund rescue package that was previously secured by his predecessor.
The 2023 bailout alleviated severe shortages of food, fuel, and medicine and restored economic growth, however, its austerity measures left millions struggling to make ends meet.
"We plan to begin negotiations with the International Monetary Fund immediately," Dissanayake said in a televised address to the nation.
In his 10-minute address, he urged to finalize a deal to restructure international sovereign bonds and obtain additional concessions for the financially strained nation.
"To advance our debt restructuring program, we are negotiating with relevant creditors to expedite the process and secure necessary debt relief," he said.
His call came after the international lender of last resort said it was ready to discuss its bailout with the new administration.
"We look forward to working together with President Dissanayake... towards building on the hard-won gains that have helped put Sri Lanka on a path to economic recovery ," an IMF spokesperson in Washington said Monday.
Referring to the periodic review of the bailout, the spokesperson said, "We will discuss the timing of the third review of the IMF-supported programme with the new administration as soon as practicable."Analysts, however, say Dissanayake likely has little room to reshape the terms of the deal.
"There are certain red lines that the IMF will not agree to negotiate," Murtaza Jafferjee of the Colombo-based economic think tank Advocata told news agency AFP.
Further adding that the IMF is unlikely to budge on core components of its $2.9 billion bailout, which also includes a ban on printing money and revenue and spending targets agreed by the last administration.
Crisis to opportunity.
Sri Lanka's 2022 financial crisis, that led to the bailout, provided Dissanayake with an opportunity, whose popularity surged after he vowed, to transform what he calls the island's corrupt political culture. In Saturday's presidential vote race, he had defeated 38 other candidates to win, backing more than 1.2 million more votes than his nearest rival.
His predecessor Ranil Wickremesinghe, who had imposed steep tax hikes and other unpopular austerity measures under the terms of the IMF package, came a distant third.
Dissanayake had previously dissolved the 225-member parliament in which his once-marginal party had just three seats and called fresh elections for November 14, which was nearly a year ahead of schedule.
Last week, self-avowed Marxist Anura Kumara Dissanayake achieved a landslide victory with promises to reverse steep tax hikes, raise public servant salaries and renegotiate the International Monetary Fund rescue package that was previously secured by his predecessor.
The 2023 bailout alleviated severe shortages of food, fuel, and medicine and restored economic growth, however, its austerity measures left millions struggling to make ends meet.
"We plan to begin negotiations with the International Monetary Fund immediately," Dissanayake said in a televised address to the nation.
In his 10-minute address, he urged to finalize a deal to restructure international sovereign bonds and obtain additional concessions for the financially strained nation.
"To advance our debt restructuring program, we are negotiating with relevant creditors to expedite the process and secure necessary debt relief," he said.
His call came after the international lender of last resort said it was ready to discuss its bailout with the new administration.
"We look forward to working together with President Dissanayake... towards building on the hard-won gains that have helped put Sri Lanka on a path to economic recovery ," an IMF spokesperson in Washington said Monday.
Referring to the periodic review of the bailout, the spokesperson said, "We will discuss the timing of the third review of the IMF-supported programme with the new administration as soon as practicable."Analysts, however, say Dissanayake likely has little room to reshape the terms of the deal.
"There are certain red lines that the IMF will not agree to negotiate," Murtaza Jafferjee of the Colombo-based economic think tank Advocata told news agency AFP.
Further adding that the IMF is unlikely to budge on core components of its $2.9 billion bailout, which also includes a ban on printing money and revenue and spending targets agreed by the last administration.
Crisis to opportunity.
Sri Lanka's 2022 financial crisis, that led to the bailout, provided Dissanayake with an opportunity, whose popularity surged after he vowed, to transform what he calls the island's corrupt political culture. In Saturday's presidential vote race, he had defeated 38 other candidates to win, backing more than 1.2 million more votes than his nearest rival.
His predecessor Ranil Wickremesinghe, who had imposed steep tax hikes and other unpopular austerity measures under the terms of the IMF package, came a distant third.
Dissanayake had previously dissolved the 225-member parliament in which his once-marginal party had just three seats and called fresh elections for November 14, which was nearly a year ahead of schedule.
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