USTPAC Calls for Holding off Reinstatement of IMF Loan to Sri Lanka

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The United States Tamil Political Action Council (USTPAC) calls on the International Monetary Fund (IMF) currently visiting Sri Lanka for consultations not to reinstate its loan until original conditions are met.

“The IMF should not reinstate the loan to Sri Lanka that was suspended in 2011,” Dr. Elias Jeyarajah, the President of the United States Tamil Action Council, said today in response to the IMF delegation currently visiting that country.

The 2009 IMF loan provided Sri Lanka with a US$2.6 billion investment package. The purpose of the loan(http://www.imf.org/external/np/vc/2009/110509.htm) was to prevent a currency crisis and possible economic collapse, and to support reconstruction following the end of the island’s civil war. As the war was primarily fought in the North and East, which is a Tamil majority area, the bulk of the reconstruction funds were to be used there. ()

At the time of the loan, key members of the IMF board raised serious concerns about the alleged war crimes and violations of human rights that had occurred during the final stages of the conflict. To secure the loan, the Government of Sri Lanka committed to a “considerable reduction” in military spending. (http://www.imf.org/external/np/vc/2009/110509.htm)

“Nothing has changed since the suspension of the loan in 2011,” Dr. Jeyarajah said. “The Sri Lankan Government has continually sought to increase its military spending since the end of the war.” The most recent annual budget showed yet another increase, from 215 billion rupees in 2011 to 230 billion rupees in 2012. "Instead of pursuing the kind of reconstruction that would facilitate true reconciliation in Sri Lanka, the Government has refused to cut military spending or allocate funding to programs that might assist the poorest and most vulnerable of Sri Lanka’s population,” Dr. Jeyarajah noted.

“The United States is to be applauded for its continued refusal to vote in favour of the loan, absent the Government of Sri Lanka meeting requirements on human rights, reconciliation and the devolution of power,” Dr. Jeyarajah said, referring to the US 2012 Appropriations Bill.

“We call upon the IMF to undertake a rigorous review of the Government's compliance with the loan conditions that were essential to many member states' approval of the loan program,” Dr. Jeyarajah concluded. "This is no time to abandon the IMF’s original, principled stance."

Media Contact:             202-595-3123    
email: info(at)ustpac(dot)org
or visit: http://www.ustpac.org

About USTPAC:
The United States Tamil Political Action Council is a registered not-for-profit organization in the U.S. with the mission of achieving a peaceful political solution to the ethnic conflict in Sri Lanka by democratic, non-violent and lawful means.

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Dr. Elias Jeyarajah
USTPAC
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