Bloomberg reported on April 22 that Beijing is ready to provide ‘urgently needed help’ to Sri Lanka. This move follows the island nation’s military deployment to suppress public outrage over its worst economic crisis in decades.
According to Xinhua News Agency, Premier Li Keqiang had a phone conversation with Prime Minister Mahinda Rajapaksa on April 22.
Li said that Beijing shares the challenges faced by Colombo and is willing to provide Sri Lanka with much-needed livelihood support within its capacity.
Rajapaksa thanked China for providing emergency humanitarian assistance and appreciated its strong support amid Sri Lanka’s unprecedented crisis.
He added that his nation willingly strengthens cooperation with China in finance, economy, trade, and tourism. Besides, Sri Lanka is willing to promote talks on a bilateral free-trade agreement.
Sri Lankan President Gotabaya Rajapaksa had ordered a three-day military deployment before a funeral of a protester killed earlier during police’s firing at the crowds.
The public showed their anger due to their suffering from worsening food and fuel shortages and rising living costs.
Sri Lanka has also undergone a serious shortage of foreign currency. Foreign exchange reserves have slumped by 70% in the past two years to only 2.31 billion dollars as of February. This dilemma has made the nation struggle to import essential commodities.
Crisis regarding the foreign exchange and the agricultural sector result in increasing inflation in Sri Lanka.
According to Xinhua, the nation’s inflation reached 21.5% in March 2022, compared to a mere 5.1% from the previous year and 17.5% in February.
Sri Lanka seeks 4 billion dollar funding from the International Monetary Fund and other lenders, hoping to ease the crisis with U.S. support.
The nation has also asked China for immediate financial relief via 2.5 billion dollars in credit.
However, Sri Lanka ambassador Palitha Kohana said that he could not provide a specific timeline and terms of the funding.