USAID chief urges crisis-hit Sri Lanka to tackle corruption

Colombia, Sri Lanka — A visiting US diplomat on Sunday urged Sri Lankan authorities to tackle corruption and introduce governance reforms alongside efforts to revive the country’s economy as a way out of its worst crisis in recent memory.

USAID Administrator Samantha Power told reporters that such steps will build international and local confidence in the government’s intentions.

“Aid alone would not end the woes of this country,” Power said. “I emphasized to the Sri Lankan President during my meeting earlier today that political reforms and political accountability must go hand in hand with economic reforms and economic accountability.”

She said international investor confidence will increase as the government tackles corruption and carries out long-awaited governance reforms. “As citizens see the government visibly following through on its commitment to make meaningful change, this in turn increases societal support for the tough economic reforms ahead,” she said.

During his two-day visit, Power announced a total of $60 million in aid to Sri Lanka. After meetings with farmer representatives at a paddy field in Ja-Ela, outside the capital Colombo on Saturday, she announced $40 million to buy agrochemicals in time for the next growing season.

Agricultural yields have more than halved in the past two growing seasons because authorities banned imports of chemical fertilizers ostensibly to promote organic farming. She said that according to the World Food Programme, more than 6 million people – nearly 30% of Sri Lanka’s population – currently face food insecurity and need humanitarian assistance.

On Sunday, she said an additional $20 million would be given to provide emergency humanitarian aid to vulnerable families.

Sri Lanka faced its worst crisis after defaulting on foreign loans, causing shortages of essentials like fuel, medicine and some food items.

It has reached a preliminary agreement with the International Monetary Fund for an envelope of 2.9 billion dollars to be disbursed over four years. However, the program relies on Sri Lanka’s international creditors providing assurances on loan restructuring. Sri Lanka’s total external debt stands at over $51 billion, of which $28 billion is due to be repaid by 2027.

Power said the United States was ready to help with the debt restructuring and reiterated that it was imperative that China, one of the island nation’s biggest creditors, cooperate in the endeavor.

Infrastructure like a seaport, an airport and a network of highways built with Chinese funding but failed to generate revenue and are partly responsible for the country’s woes.

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