The Resolution for the Implementation of the Arrangement under the Extended Fund Facility (EFF) of the International Monetary Fund (IMF) for Sri Lanka was passed in the parliament today (April 28) with majority votes.
Members of Parliament voted for the resolution on the implementation of the IMF-supported program following a three-day debate from April 26 - 28.
A total of 120 MPs voted in favour of the Resolution while 25 voted against it. Thereby, the resolution was passed by a majority of 95 votes.
The main opposition Samagi Jana Balawegaya (SJB), the Tamil National Alliance (TNA), Sri Lanka Freedom Party (SLFP) and MP Patali Champika Ranawaka abstained from voting as they refused to back the resolution.
Meanwhile, the National People’s Power (NPP), Wimal Weerawansa-led ‘Uththara Lanka Sabhagaya’ and MP Dullas Alahapperuma-led Freedom People’s Congress voted against it.
It is noteworthy that opposition MP A.H.M. Fowzie representing the SJB, dissident MPs Anura Priyadarshana Yapa, John Seneviratne and Sudarshini Fernandopulle have endorsed the resolution along with the MPs of the ruling party Sri Lanka Podujana Peramuna (SLPP)
President Wickremesinghe had previously noted that the key points of the IMF agreement would be enacted into law, once the resolution on the implementation of the EFF program is passed in the parliament.
On March 20, 2023, the Executive Board of the IMF green-lighted a 48-month extended arrangement under the EFF program of SDR 2.286 billion (approximately USD 3 billion) for Sri Lanka.
The EFF program opens doors for Sri Lanka to access financing up to USD 7 billion from the IMF, international financial institutions and multilateral organizations.
The program is expected to provide much-needed policy space to drive the economy out of the unprecedented challenges and instill confidence amongst all the stakeholders.
Soon after receiving the IMF’s board approval, Sri Lanka received an initial disbursement of USD 333 million (amounting to SDR 254 million) from the EFF arrangement, which is expected to catalyze new external financing including from the ADB and the World Bank.
Sri Lanka reached a Staff-Level Agreement with the IMF on a four-year program supported by the Extended Fund Facility on September 01, 2022.
The government is currently negotiating debt restructuring with bondholders and creditors before the IMF reviews the agreement in September.
Earlier this month, Japan, India and France launched a common platform for talks among bilateral creditors to coordinate restructuring of Sri Lanka’s debt.
The three creditor countries have been working closely for a coordinated debt restructuring process for the island nation.
China, Sri Lanka’s largest bilateral creditor, did not join the initiative at the outset, however, on several occasions, reiterated support for Sri Lanka’s debt restructuring process. The Asian economic giant says it has been in close communication with the island nation and supports Chinese financial institutions in actively discussing debt treatment arrangements with Sri Lanka.
