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Minister Amaraweera wants IMF bailout, hints at letting national carrier go

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ECONOMYNEXT – Amid reports that cash-strapped Sri Lanka’s ruling coalition is split down the middle over an International Monetary Fund (IMF) bailout, another cabinet minister last week spoke in favour of IMF assistance, even going as far as to hint at the sale of the country’s national carrier.

“We will have to go to the IMF. There is nothing wrong with that… since we have no other option,” Environment Minister Mahinda Amaraweera said speaking to reporters on Wednesday (29).

Amaraweera is a member of the Sri Lanka Freedom Party (SLFP), which is increasingly at odds with the ruling Sri Lanka Podujana  Peramuna (SLPP). State Minister Dayasiri Jayasekara, the SLFP’s general secretary, had also recently advocated going to the IMF.

“Of course, we need to not accept every condition put forward by the IMF,” said Amaraweera.

“We have been informed that the central bank governor and the Treasury Secretary will be joining the cabinet meeting next Monday (03). I think we will be able to reach a final consensus then,” he added.

Co-cabinet spokesman and Media Minister Dullas Alahapperuma on December 21 told reporters that the cabinet had “exchanged views” on an IMF bailout for the second week in a row but no decision had been made.

Minister Amaraweera, meanwhile, also commented on SriLankan Airlines, the national carrier, and other under-performing state owned enterprises (SOEs).

“At this point, we may have to let go of certain institutes. For example, SriLankan suffers losses in the billions. These losses are borne by people who have never even touched [an aircraft],” he said.

A day before Sri Lanka raised fuel prices last week, Trade Minister Bandula Gunawardena told reporters that the IMF would ask to cut the bloated public sector, reduce the budget deficit, make state enterprises profitable, and raise fuel and electricity prices.

A few days earlier, State Minister Jayasekera said after last week’s cabinet meeting that the IMF imposes conditions such as making state enterprises profitable.

“It is a good thing to do that,” Jayasekera said.

Finance Minister Basil Rajapaksa had already said the state workers and state enterprises were a big burden on the economy.

Older IMF baiout programs typically involve cutting the deficit with tax hikes (revenue based), trimming expenses (spending based) expressed as a net domestic finance target, a foreign reserve target and a reserve money target.

However Sri Lanka’s last failed extended fund facility from IMF program where money was printed within the program to create forex shortages and worsen foreign debt, an inflation target was given and the budget target was defined as a primary deficit.

Instead of a measurable reserve money or ceiling on central bank credit an inflation target was given, allowing the trigger happy central bank to print money and trigger a currency crisis within the program.

Under revenue based fiscal consolidation, state spending soared and the currency collapsed from 151 to 183 under a so-called flexible exchange rate where the exchange flipped from pegged to floating rapidly and interventions were sterilized on top of it.



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Delay in govt. response to UK sanctions on ex-military chiefs, and others causes concern

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General Silva / Admiral Karannagoda

Admiral of the Fleet Wasantha Karannagoda said that he is still waiting for the government’s response to the UK sanctions imposed on three ex-military officers, including him, and a former member of the LTTE.

The former Navy Chief said so in response to The Island query whether he was aware of the position taken by a three-member ministerial committee, consisting of Foreign Minister Vijitha Herath, Justice and National Integration Minister Harshana Nanayakkara and Deputy Defence Minister Maj. Gen (retd) Aruna Jayasekera.

The government named the committee in the wake of the UK declaration of travel bans and asset freezes in respect of Karannagoda, General Shavendra Silva, General Jagath Jayasuriya and Vinayagamoorthy Muralitharan, also known as Karuna. Maj. Gen. Jayasekera said that they inquired into the issue at hand.

Karannnagoda said that he would like to know the government’s recommendations if the ministerial committee briefed the Cabinet as per a decision taken by the Cabinet of Ministers. Karannagoda said that the issue should have been taken at the highest level as various interested parties continue to humiliate the war-winning military by targeting selected individuals.

Other sources, familiar with the issues at hand, told The Island that the government was yet to announce its stand.

Sources pointed out that the Opposition has been silent on what they called a matter of utmost national importance.

Cabinet spokesman Dr. Nalinda Jayathissa is on record as having described the UK move as a unilateral move and that committee was formed to examine the developments and recommend appropriate measures to the Cabinet.

Foreign Minister Herath told The Island the government was not successful in getting the British to withdraw sanctions. Describing the UK decision as unilateral, the Miniser said that the government conveyed its concerns but the UK didn’t change its stand.

The Island raised the issue with Minister Herath and Admiral Karannagoda in the wake of British MP of Sri Lankan origin, Uma Kumaran requesting the UK Foreign Secretary Yvette Cooper to expand on the government’s sanctions imposed on the four above-mentioned persons.

During a Foreign Affairs Committee meeting on 16 December, the MP for Stratford and Bow highlighted the lack of accountability and political will from the current Sri Lankan government to address war crimes and mass atrocities committed in Sri Lanka.

Sources said that David Lammy, who served as Secretary of State for Foreign, Commonwealth and Development Affairs at the time of the declaration of sanctions, had no qualms in declaring that the action taken against four Sri Lankans was in line with a commitment he made during the election campaign to ensure those responsible wouldn’t be allowed impunity. The UK government statement quoted Lammy as having said that this decision ensured that those responsible for past human rights violations and abuses were held accountable.

By Shamindra Ferdinando

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Sri Lanka outlines seven key vectors of international cooperation at Moscow forum

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Shobini

Sri Lankan Ambassador to the Russian Federation, Shobini Gunasekera recently presented a conceptual framework of seven key vectors that defined contemporary international relations and facilitated dialogue among States. She made the presentation at XI Moscow International Financial and Economic Forum held under the theme “Building Bridges: Partnership without Borders”.

In her address, the Ambassador emphasised that these vectors represent the channels through which ideas circulate, trade expands, and peace is strengthened, serving as guiding principles for cooperation amid global uncertainties. The seven key vectors highlighted were economic ties as a foundation for long-term stability; political choice and diplomacy through dialogue and multilateral engagement; security cooperation to address cross-border threats; cultural linkages through education, tourism, and professional exchanges; technological advancement, particularly in digital systems and artificial intelligence; environmental stewardship through collective action on renewable energy and climate change; and humanitarian obligations, including disaster relief and development cooperation.

 Drawing on Sri Lanka’s experience, the Ambassador illustrated the practical application of these principles by highlighting the country’s strategic location in the Indian Ocean, its role as a trade and logistics hub, and its active engagement in regional groupings such as BIMSTEC and the Indian Ocean Rim Association, where the Russian Federation serves as a Dialogue Partner.

 The potential for enhanced Sri Lanka–Russia bilateral cooperation was underscored, particularly through complementarities between Russia’s technological and energy expertise and Sri Lanka’s logistical capabilities and maritime infrastructure. She noted that such synergies could support joint initiatives in trade, innovation, tourism, and logistics, while cultural and scientific exchanges would further strengthen mutual understanding between the two countries.

Concluding her remarks, the Ambassador stated that sustained progress requires dialogue, mutual respect, and forward-looking partnerships capable of shaping a shared and stable future.

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Sri Lanka third most preferred destination for Indians

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Thailand takes top place

Travel website Make My Trip has named Sri Lanka as the third most booked international destination by Indian travellers for the festive period, following Thailand and the United Arab Emirates (UAE).

According to a report released by MakeMyTrip, an analysis of booking trends between 20 December and January 2026 compared to the same period last year, highlighted a growing interest in Sri Lanka as a preferred destination.

Thailand ranked first, while the UAE secured second place. Vietnam recorded a notable rise, moving from seventh position last year to fourth this year, followed by Malaysia, Indonesia, Singapore, the UK, the US, and Hong Kong.

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