We won’t beg for aid: Sri Lanka

Sri Lanka will ‘never go after donor countries or agencies with a begging bowl’ for aid, the country’s Central Bank chief has declared  despite waiting for the International Monetary Fund (IMF) to approve a loan request for US $1.9 billion.

“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.

“We have the capability to stand on our own and necessary funds are available locally for the resettlement and reconstruction in the North. With our new found dignity and identity in the international community Sri Lanka does not want to go after anyone for aid with bended knees. But we accept whatever assistance offered without strings and with respect,” Cabral added.

Sri Lanka approached the IMF 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.

Commenting on the IMF loan Cabraal said: “No risk is involved in obtaining the IMF loan as it is entirely a non political transaction between the IMF and a member state. Besides, we have a right to seek IMF funds as a member and the IMF has an obligation to approve it in due course. The IMF has categorically said the loan will be approved,”

However, a decision on the loan has been put off due to political pressure from the US, Britain and other Western nations over Sri Lanka’s handling of the final stages of the battle against the Tamil Tigers and charges that thousands of civilians were intentionally killed by Sri Lankan security in the final months of the war.

Despite pressure from the West, Cabraal said he was confident the rescue package would be approved but added: "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,"

According to IMF, the loan for Sri Lanka is still not ready for approval for its executive board.

IMF spokesperson Caroline Atkinson said Friday, June 19  "whenever there is final agreement, then a program would go to the Executive Board."

According to Cabraal the World Bank, ADB and several other friendly countries had responded positively for assistance for the reconstruction and resettlement process.

Cabraal 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.

"The future scenario is very comforting to our foreign exchange situation," he said.