Sri Lanka won't beg for aid: central bank chief
karthika
COLOMBO (AFP) – War ravaged Sri Lanka will not beg for foreign aid
even as a 1.9 billion dollar bailout from the IMF has been delayed,
the island's central bank chief said on Friday.
"We will never go after donors or lending agencies with a begging
bowl. We are capable of standing on our own and raise funds through
capital markets," Central Bank of Sri Lanka Governor, Nivard Cabraal,
told AFP.
Sri Lanka tapped the International Monetary Fund in March in a bid to
stave off its first balance of payment deficit in four years after the
island's foreign currency reserves fell to around six weeks worth of
imports.
The loan has been put off due to political pressure from the US,
Britain and other Western nations over Colombo's handling of the final
stages of the battle against Tamil separatists and charges that
thousands of civilians were killed.
The United States is the main shareholder in the IMF and its approval
is key to the release of the money. But the US has supported calls for
a probe into alleged war crimes committed by Sri Lankan government
troops.
Despite pressure from the West, Cabraal said he was confident the
rescue package would be approved.
The island's 37-billion-dollar economy was caught up in the global
economic crisis last year, with exports of garments and tea affected
and foreign remittances slowed.
"We have dignity and our own identity in the international community.
Sri Lanka does not want to go after anyone for aid with bended knees,"
Cabraal said.
He added that foreign reserves have picked up in the past several
weeks, with money coming from aid flows -- to meet the humanitarian
needs of nearly 300,000 displaced people in the north -- remittances
and foreign investments.
The central bank was also negotiating a 500 million dollar loan from
Libya and another 500 million dollars from an unnamed "friendly
country" to help with post-war reconstruction, he said.
"Little by little, the urgency of the IMF loan is easing. I am not
saying that we don't need it. The threat of a downturn is receding and
Sri Lanka is getting some inflows after the end of the war," Cabraal
said.
"The future scenario is very comforting to our foreign exchange
situation," he said.
The central bank plans to revise upwards the island's economic
forecast for 2009 to between four to five percent, from 2.5 percent to
3.0 percent announced earlier this year.
Sri Lanka's economy posted 6.0 percent growth in 2008, down from 6.8
percent in 2007.
"For a very long time, every time someone spoke about Sri Lanka's
economy, they responded saying if not for this war things would be
better. Now the war is over and we have a tremendous scope for
economic development," Cabraal said.