Sri Lanka will receive up to $600 million from the World Bank over the next four months to buy medicines and other essential goods.
Sri Lanka will receive between $300 million and $600 million from the World Bank over the next four months to buy medicines and other essentials, the country’s finance minister said on Friday, as the Indian Ocean island suffers its worst economic crisis in decades.
Finance Minister Ali Sabri, who is in Washington to negotiate a rescue package with the International Monetary Fund, said in a video conference that talks with the IMF could take some time and that the World Bank had agreed to provide support in the meantime.
Neighboring India has also agreed to provide $500 million to buy fuel, and negotiations are underway on an additional $1 billion from New Delhi, which has already provided a $1 billion line of credit, Sabri said.
Sri Lanka is on the verge of bankruptcy, with almost $7bn of its total $25bn in foreign debt due to be paid off this year. A severe shortage of foreign exchange means that the country lacks money to buy imported goods.
Sri Lankans have endured months of shortages of basic goods such as food, cooking gas, fuel and medicine, queuing for hours to buy the limited stock available.
Fuel prices have risen several times in recent months, resulting in sharp increases in transport costs and the prices of other goods. There was another round of raises earlier this week.
The government has announced that it will suspend payment of foreign loans pending talks with the IMF.
Dozens of protesters continued to occupy the entrance of the president’s office for the fourteenth day Friday demanding the resignation of President Gotabaya Rajapaksa and his powerful ruling family over the economic crisis. The protests have spread to various parts of the country, where people have blocked roads with vehicles.
On Tuesday, one person was killed and 13 others injured when police opened fire on a group of people protesting against rising fuel prices, the first deaths since the protests began.
The shooting has drawn widespread condemnation and the government has vowed to conduct an impartial investigation.
Much of the anger expressed in the weeks of escalating protests has been directed at Rajapaksa and his older brother, Prime Minister Mahinda Rajapaksa, who head an influential clan that has been in power for most of the last two decades. Five other family members are lawmakers, three of whom resigned as cabinet ministers two weeks ago.
Sabri said the government is also seeking help from China, Japan and the Asian Development Bank.
China has already pledged some $31 million in emergency aid, including 5,000 tons of rice, medicine and raw materials. He previously said he was considering a request for $2.5 billion in economic assistance, including a line of credit to buy essential items and a loan.
The debt crisis is blamed in part on projects built with Chinese loans that have not generated any money.