Concessionary credit to Lanka, Amunugama urges IMF

by L. S. Ananda WEDAARACHCHI

Sri Lanka is no longer a Least Developed Country. LDC - since its per capita income is more than US$ 2,000 said Public Administration and Home Affairs Minister and Deputy Finance and Planning Minister Dr. Sarath Amunugama.

Sri Lanka's economy is more stable and stronger than ever. Its foreign exchange reserve is sufficient for six months, the Minister said. He reminded that during Sirimavo Bandaranaike's regime Sri Lanka had a foreign exchange reserve only for two days.

He said he submitted at the preliminary session of G20 held in London recently that G20 must make sure that economic success achieved by developing countries should not be penalised by allowing concessionary credit only to low income countries.

Dr. Amunugama attended the G20 preliminary meeting held in London recently.

In an exclusive interview with the Sunday Observer Dr. Amunugama said while the International Monetary Fund (IMF) standby the agreements on very concessionary interest rate of one percent, bilateral and other multilateral loans carry much higher interest rates.

"The IMF cannot be a substitute for the UN Security Council and therefore it should not make decisions on political grounds," he said.

"Developing countries would welcome a downward revision of high interest rates, since it would help accelerate economic development," he said.

"IMF and World Bank (WB) have special programs and interest rates for low income countries.

But it would not be fair to deprive Sri Lanka of the opportunity of enjoying low interest loans on the premise that it is a middle income country, the Minister pointed out.

He said that he appealed to the G20 to make sure that economic success should not be penalized by allowing concessionary credit only to low income countries. The G20 group meeting will be held in USA next month.