Sri Linka seeks WB Covid’s loan

COLOMBO: Sri Lanka will seek an emergency loan of $100 million from the World Bank (WB) for a coronavirus vaccination drive, officials said on Wednesday, as the country struggles with an acute currency crisis.

The Covid-19 pandemic has claimed more than 12,000 lives and infected over half a million people in Sri Lanka, which is also suffering food shortages because of the cash crunch.

The government said in a statement that the cabinet had “granted approval to the resolution furnished by the minister of health for obtaining the relevant supplementary financing facility” from the international lender.

The statement said that the WB had indicated willingness to provide the money to buy 14 million doses of the Pfizer vaccine and finance “other costs pertaining to vaccination.”

Sri Lanka has double-jabbed more than half of its 21 million people, mostly with Chinese vaccines, but has remained in the grip of a major Covid-19 wave since April.

Medical experts say that the death toll is much higher than the official figure. The economy, shorn of its key tourism sector by the pandemic, shrank by an unprecedented 3.6 per cent last year.

President Gotabaya Rajapaksa declared a state of emergency on August 31 to deal with food shortages, as most banks have run out of dollars to finance imports. But he has resisted calls to secure a bailout from the International Monetary Fund (IMF) as the country faces what finance minister Basil Rajapaksa recently described as a “dangerous foreign exchange crisis.”

Central bank governor Ajith Cabraal has said the IMF would want Sri Lanka to depreciate its currency in return for a bailout, but Colombo cannot accept that. Sri Lanka’s foreign reserves stood at $3.55 billion at the end of August, while the country has to repay about $2 billion in foreign debts before the end of the year.

The main opposition SJB party has led calls for the government to seek IMF cash to avoid a sovereign debt default next year. Struggling to raise domestic revenue, the government on Wednesday raised its debt ceiling by 400 billion rupees ($2.0 billion) so it can meet its expenses in the next three months.