India stands ready to continue working with Sri Lanka for rapid post-Covid economic recovery in line with its ‘Neighbourhood First’ policy.
Talking about the economic crisis in Sri Lanka, the spokesperson for the Ministry of External Affairs, Arindam Bagchi, said, “We are neighbours and close friends. There has been an evolving economic situation as well as other developments in Sri Lanka. To help mitigate the economic situation there, we have extended assistance — $2.5 billion — in the past two to three months, including credit facilities for fuel and food, which are most required.”
Since mid-March, over 2,70,000 MT of food and oil has been delivered to Sri Lanka. In addition, 40,000 tonnes of rice have been supplied under the recently-extended $1 billion credit line, he said.
“The relationship between India and Sri Lanka is rooted in the civilisational values and aspirations of our two people, our cooperation based on commonality and interest. India-Sri Lanka relations have been strengthened in recent months.
“We stand ready to continue working with Sri Lanka for rapid post-Covid economic recovery in line with our ‘Neighborhood First’ policy. Our readiness, whatever support we can provide, has been demonstrated by our actions till now,” Bagchi said.
The Sri Lankan economy is facing a twin challenge of fast-eroding foreign exchange reserves and surging inflation, leading it to the brink of bankruptcy. Sri Lanka is also facing solvency issues with unsustainable debt levels.
With unprecedented shortage of foreign exchange, the basic needs of the people of Sri Lanka cannot be met. There are huge queues outside petrol pumps as there is no foreign exchange reserve to import petrol, pharmacies have run out of medicines while newspaper houses have run out of newsprint.
Since January 2022, the inflation rate has crossed 18 per cent in Sri Lanka. Angry residents have hit the streets in protest and the Sri Lanka government has responded by imposing a curfew.