Sri Lanka to receive World Bank assistance to deal with economic crisis

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Finance Minister Ali Sabri, who is in Washington to negotiate a bailout with the International Monetary Fund, said in a videoconference that talks with the IMF could take some time and that the World Bank has agreed to provide support in the meantime.

Neighboring India has also agreed to provide $500 million to buy fuel, and talks are underway over an additional $1 billion from New Delhi, which has already provided a $1 billion line of credit, said Sabri.

Sri Lanka is on the verge of bankruptcy, with almost $7 billion of its total external debt of $25 billion due to be repaid 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 essentials such as food, cooking gas, fuel and medicine, queuing for hours to buy the limited supplies available.

Fuel prices have risen several times in recent months, leading to sharp increases in transport costs and the prices of other goods. There was another round of increases earlier this week.

The government announced that it was suspending the repayment of foreign loans pending talks with the IMF.

Dozens of protesters continued to occupy the entrance to the president’s office for a 14th day on Friday to demand the resignation of President Gotabaya Rajapaksa and his powerful ruling family due to the economic crisis. Protests have spread to several 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 was widely condemned and the government pledged to conduct an impartial investigation.

Much of the anger expressed over the weeks of mounting protests has been directed at Rajapaksa and his older brother, Prime Minister Mahinda Rajapaksa, who lead an influential clan that has been in power for most of the past two decades. Five other family members are lawmakers, three of whom resigned as ministers two weeks ago.

Sabri said the government is also reaching out to China, Japan and the Asian Development Bank for help.

China has already pledged about $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 aid, including a line of credit to buy basic necessities and a loan.

The debt crisis is partly blamed on projects built with Chinese loans that have failed to bring in any money.

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